Dec 2, 2011 | Housing Analysis
If you’re waiting for home prices to reach its bottom, you may have missed your window.
After 3 consecutive months of easing, the Pending Home Sales Index jumped 10 percent in October, lending credence to the belief that housing is in recovery.
The Pending Home Sales Index is a monthly publication from the National Association of REALTORS®. It measures the number of homes under contract to sell nationwide. October’s reading is the highest for all of 2011, and the second-highest dating back to April 2010.
April 2010 was the last month of the last year’s federal home buyer tax credit.
For buyers and sellers in Worcester and nationwide, the Pending Home Sales Index is a housing metric worth watching. Different from the Existing Home Sales and New Home Sales reports which report on “the past”, the Pending Home Sales Index is a forward-looking housing market indicator.
According to the National Association of REALTORS®, 80% of homes under contract close within 2 months.
The majority of the rest close within (more…)
Oct 28, 2011 | Housing Analysis
Nationwide, fewer homes are going under contract to sell.
According to the National Association of REALTORS®, the Pending Home Sales Index fell 5 percent last month. September marks the fourth consecutive month in which the index has dropped.
The Pending Home Sales Index is a monthly index which measures the number of homes under contract to sell, but not yet closed. As such, it’s among the few “forward-looking” housing indicators; a data set meant to predict future home sales.
80% of homes under contract close within 2 months so, if the September Pending Home Sales Index is to be believed, we should expect home sales to decline through October and November.
And that’s before we account for cancelled contracts.
Also from the National Association of REALTORS®, we learn that 18 percent of homes under contract failed to close in September. This is double the failure rate from September 2010 and it, too, should drag Existing Home Sales volume lower this fall.
On a seasonally-adjusted, regional basis, the Pending Home Sales Index fell everywhere.
- Northeast Region: -4.7% from August
- Midwest Region : -6.2% from August
- South Region : -5.5% from August
- West Region : -2.1% from August
For home buyers and sellers in Fitchburg , though, regional data remains too broad to be useful. Housing markets are local, meaning that each block on each street on each city has its own distinct economy. When 9 states are grouped into a single “region”, it’s neither helpful nor relevant to people making buy/sell decisions.
That said, the Pending Home Sales Index remains important because it’s about housing, and housing is a keystone of the U.S. economic recovery.
The market looks ideal for buyers. Home prices are rising, but slowly; and mortgage rates remain near rock-bottom levels. Home affordability is high and should remain that way for the next few weeks.
If you’re shopping for a home, it’s an excellent time to go under contract.
Jul 29, 2011 | Housing Analysis
Buyers are writing contracts at a furious pace nationwide.
On a seasonally-adjusted basis, the Pending Home Sales Index rose 2 percent last month to reach its highest level since March.
A “pending home sale” is a home under contract to sell, but not yet closed.
The forward-looking Pending Home Sales Index is up 11 percent from its low of the year, according to the National Association of REALTORS®, and well ahead of its rolling 6-month average.
Unfortunately, national data isn’t always helpful for buyers and sellers in Leominster and nationwide. To help make data more relevant, therefore, the official Pending Home Sales Index report includes a region-by-region breakdown.
Between May and June 2011, results were mixed:
- Northeast Region: -0.4%
- Midwest Region : -3.7%
- South Region : +4.4%
- West Region : +6.4%
However, even the value of regional data may be dubious. (more…)
