NAR's PHSI has determined that pending home sales rose 4.1% to an index level of 101.4 in March from an upwardly revised 97.4 in February. This is 12.8% above March 2011, when it was 89.9. The index is now at the highest level since April 2010, when it reached 111.3.
The PHSI in the Northeast slipped 0.8% to 78.2 in March, but is 21.1% above March 2011. In the Midwest, the index declined 0.9% to 93.3, but is 16.9% higher than a year ago. Pending home sales in the South rose 5.9% to an index of 114.1 in March and are 10.6% above March 2011. In the West, the index increased 8.7% in March to 108 and is 9% above a year ago.
According to NAR, the index is based on a large national sample, typically representing about 20% 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 as well as the first of five consecutive record years for existing-home sales.
‘First-quarter sales closings were the highest first-quarter sales in five years,’ says Lawrence Yun, NAR's chief economist. ‘The latest contract signing activity suggests the second quarter will be equally good. The housing market has clearly turned the corner. Rising sales are bringing down inventory and creating much more balanced conditions around the country, which means home prices will be rising in more areas as the year progresses.’