(May 4, 2009 Release)
Highlights
• The pending home sales index rose 3.2 percent in March to 84.6, compared to 82.0 in February.
• The pending home sales index rose 1.1 percent from a year ago.
• The South and West recorded monthly increases of 8.5 and 3.9 percent, respectively. The Midwest and Northeast recorded declines of 1.0 andd 5.7 percent, respectively.
| Pending Home Sales Index | ||||
| Mar 09 | Feb 09 | 3 mo Avg | 1 year ago | |
| United States | 84.6 | 82.0 | 82.3 | 83.7 |
| % change | 3.2 | 2.0 | 2.8 | 1.1 |
| Northeast | 59.5 | 63.1 | 60.1 | 78.4 |
| % change | -5.7 | 9.2 | -1.0 | -24.1 |
| Midwest | 82.3 | 83.1 | 79.3 | 76.0 |
| % change | -1.0 | 14.5 | 3.8 | 8.3 |
| South | 93.2 | 85.9 | 87.1 | 86.5 |
| % change | 8.5 | 4.5 | 7.0 | 7.7 |
| West | 93.1 | 89.6 | 95.4 | 91.6 |
| % change | 3.9 | -13.5 | -2.4 | 1.7 |
Source: National Association of Realtors; index is seasonally adjusted
Analysis
The March pending homes sales release offered favorable news for future existing home sales activity in our nation’s housing sector. The index increased both on a month over month and year over year basis. Both were improvements from the February numbers.
The rise in March’s pending home sales suggests that the January’s 80.4 index may be the cyclical low for this release. Pending home sales measures contracts on existing homes rather than closings so the improvement in the index portends favorably for April/May existing home sales reports. However, it is likely that a meaningful number of these pending contracts may fallout before reaching closing due to tight lender credit requirements.
Looking forward, it is likely that the housing sector is scraping bottom as evidenced by recent monthly data of the major housing measures– housing starts, existing home sales and new home sales which are posting numbers slightly above their January cyclical lows. However, a severe recession and a deteriorating job situation will keep the housing sector from experiencing any meaningful gains for the remainder of this year.
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