The report this morning from the
National Association of Realtors® (NAR) on pending home sales shows continued
volatility in the housing market. After
reaching a two-year peak in July, the NAR's Pending Home Sales Index (PHSI)
fell in August to 99.2 percent from the revised estimate of 101.9 in July. August numbers are still slightly more than
10 percent higher than in August 2011 when the Index was at 89.6.
The PHSI is a forward-looking index
based on contract signings. Actual sales
of the contracted homes are generally expected within 60 to 90 days of signing.
July had seen the most contract activity
since April 2010 when buyers were rushing to beat the deadline for the home
buyer tax credit. The current report
revised the July Index number upward from 101.7.
Lawrence Yun, NAR chief economist, said some volatility
can be expected in the monthly readings. "The performance in
month-to-month contract signings has been uneven with ongoing shortages of
lower priced inventory in much of the country, and across most price ranges in
the West, but activity has remained at notably higher levels this year," Yun said.
shows 16 consecutive months of year-over-year increases, and that has
translated into a higher number of closed sales. Year-to-date existing-home
sales are 9 percent above the same period last year, but sales were relatively
flat from 2008 through 2011," Yun added.
NAR expects existing-home sales to rise 9 percent this year to 4.64 million and
another 8 percent in 2013 to nearly 5.02 million. With generally balanced
inventory conditions in many areas, the median existing-home price is projected
to rise about 5 percent in both 2012 and 2013.
The August dip
was felt almost nationwide. The PHSI
rose 0.9 percent to 78.2 in the Northeast region which is 19.9 percent above
the level in August 2011. Pending sales
dipped in the other three regions, down 2.6 percent to 95.0 in the Midwest
which also remained 19.9 percent higher year-over-year, and 1.1 percent in the
South. That region's index was 110.4 in
August, 13.2 percent above one year earlier.
Tight inventories were blamed for a 7.2 percent decline in the August
index, now 4.2 percent below one year earlier.