sales changed little from December to January the National Association of
Realtors® (NAR) said today. That is not
surprising as the bad weather NAR blamed for the lackluster December pending
sales numbers did not change going into January either.
Pending Home Sales Index (PHSI) inched up 0.1 percent to 95.0 in January while
the December number was revised up to 94.9 from the previously announced
92.4. January pending sales were 9.0
percent below a year earlier when the PHSI was 104.4. The
December index reading was the lowest since November 2011 when it stood at
index is a forward looking indicator based on contract signings for home
purchases. Transactions are generally
expected to be finalized within 60 days of contract signing.
Lawrence Yun, NAR chief economist, confirmed that weather
remained a factor in January. "Ongoing
disruptive weather patterns in much of the U.S. inhibited home shopping," he
said. "Limited inventory also is playing a role, especially in the West, while
credit remains tight and affordability isn't as favorable as it was a year
in the South and Northeast were by offset declines in the West and Midwest. The PHSI in the Northeast rose 2.3 percent to
79.0 in January, but is 5.3 percent below a year ago. In the Midwest the index
declined 2.5 percent to 92.9 and is 9.3 percent lower than January 2013.
Pending home sales in the South increased 3.5 percent to an index of 111.2 but
remained 5.5 percent below a year ago. The index in the West fell 4.8 percent
in from December to 84.2, and is 17.5 percent below January 2013.
projecting that sales of existing home will be weak in the first quarter but prices
will continue to rise because of limited inventory. "Increasing new home
construction can quickly solve two problems, producing more inventory and
taming price growth," Yun said.
should pick up in the middle part of the year and finish just over 5.0 million units
for the year, slightly below the volume in 2013. The national median existing-home price is
forecast to grow in the range of 5 to 6 percent.
Home Sales Index is based on a large national sample, typically representing
about 20 percent of transactions for existing-home sales. An index of 100 is
equal to the average level of contract activity during 2001, which was the
first year to be examined. By coincidence, the volume of existing-home sales in
2001 fell within the range of 5.0 to 5.5 million, which is considered normal
for the current U.S. population.