Pending home sales rose in February, potentially signaling a second surge of home sales in response to the home buyer tax credit, according to the National Association of Realtors (NAR).
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed in February, rose 8.2% to 97.6 from a downwardly revised 90.2 in January, and remains 17.3% above February 2009, when it was 83.2. The data reflect contracts and not closings, which usually occur with a lag time of one or two months.
‘The healthy gain hints home prices are continuing to flatten,’ says Lawrence Yun, NAR chief economist. "We need a second surge to meaningfully draw down inventory and definitively stabilize home values."
The PHSI rose 9% in the Northeast to 77.7, 21.8% in the Midwest to 97.9, 9.2% in the South to an index of 107, and fell 4.8% in the West to 98.
"Anecdotally, we're hearing about a rise of activity in recent weeks with ongoing reports of multiple offers in more markets, so the March data could demonstrate additional improvement from buyers responding to the tax credit," Yun adds.
SOURCE: National Association of Realtors