Pending home sales were flat in September, inching up 0.3 percent on the Pending Home Sales Index (PHSI) maintained by the National Association of Realtors® (NAR). The index rose from 99.2 in August to 99.5. This is a 14.5 percent increase from September 2011 when the index was 86.9.
Pending home sales have increased on an annual basis for 17 straight months and the year-over-year increase last month were consistent across the country where all regions showed annual increases; in three regions those changes are in the double digits. The PHSI is a forward-looking indicator measuring contracts for home purchases. Signed contracts are generally expected to close in 60 to 90 days.
Lawrence Yun, NAR chief economist, said pending home sales continue to hold a higher ground. "Home contract activity remains at an elevated level in contrast with recent years, but currently appears to be bouncing around in a narrow range," Yun said. "This means only minor movement is likely in near-term existing-home sales, but with positive underlying market fundamentals they should continue on an uptrend in 2013."
NAR is predicting that existing home sales will increase 10 percent in the fourth quarter of 2012 and 8.7 percent in 2013 to an annual total of 4.64 million units in 2012 and 5.05 million in 2013. The Association also expects housing starts to rise by 45.3 percent in 2013. The national median home price is expected to increase 6 percent this year and 5 percent in 2013 due in part to tightening inventories.
Pending sales in the Northeast were up 1.4 percent to 79.3 in September, 26.1 percent higher than a year ago. In the Midwest the index fell 5.8 percent to 89.5 in September but is 19.3 percent above September 2011. Pending home sales in the South increased 1.0 percent to an index of 111.5 in September and are 17.6 percent higher than a year ago. In the West the index rose 4.3 percent in September to 106.9, but is only 0.8 percent above September 2011.