Pending Home Sales Index Leveling Out Index was up 1.3%
RISMEDIA, July 10, 2006—Based on contracts signed in May, The Pending Home Sales Index was up 1.3 percent to a level of 113.4 from an index of 111.9 in April; however, this was 10.1 percent lower than May 2005.
The index is derived from pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed; pending sales typically are finalized within a month or two of signing.
An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined, and was the first of five consecutive record years for existing-home sales.
David Lereah, NAR's chief economist, said the index appears to be moderating: "The slight change in pending home sales indicates the market is beginning to level out. This is consistent with our forecast, which is showing a soft landing for the housing sector. We are entering the second phase of the transition period from the housing boom, in which sellers are becoming more realistic about their expectations - sales are stabilizing and annual home price appreciation is returning to historic norms."
Regionally, the PHSI in the South was down 1.7 percent in May and was 7.3 percent lower than May 2005. In the Northeast, the index was down 0.6 percent in May and 7.8 percent below a year ago. The index in the Midwest was up 0.6 percent to 100.9 in May, but was also 13.6 percent lower than May 2005. The index in the West rose 9.9 percent to 110.1 in May but was 12.9 percent below a year earlier. |
