PHSI Gains 1.1%

Here is a bit of genuinely good news: The NAR’s Pending Home Sale Index rose 1.1% from March 2008. The less significant monthly gains were also positive, rising 3.2% from February to March 2009.

As previously noted, this index is based on signed contracts, most of which will close 30 to 90 days later. This gives us an early read on the Existing Home Sales for June/July.

Its noteworthy that most of the gains came in the regions with the highest foreclosures: The South and West gained, while the NorthEast and Midwest fell.

Of course, the NAR cannot help but accentuate the positive regardless:

Pending home sales rose with many first-time buyers taking advantage of historically good housing affordability conditions, according to the National Association of Realtors.

The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from a level of 82.0 in February, and is 1.1 percent higher than March 2008 when it was 83.7.

Lawrence Yun, NAR chief economist, said it should take a few months for the market to gain momentum. “This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a downpayment,” he said. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”

At least these guys are consistent: They spin regardless of whether the data is good or bad . . .

phsi-5309
Source: Asha G. Bangalore, Northern Trust Global Economic Research

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Previously:
NAR Housing Affordability Index is Worthless (August 13th, 2008)
http://www.ritholtz.com/blog/2008/08/nar-housing-affordability-index-is-worthless/

No, Pending Home Sales Index Did Not Rise (December 2007)
http://bigpicture.typepad.com/comments/2007/12/anotehr-wtf-mom.html

Pending Home Sales Index, NAR Housing Market “Bottoms” (January 2008)
http://bigpicture.typepad.com/comments/2008/01/a-history-of-ho.html

Source:
Pending Home Sales Rise, Housing Affordability Near Record
NAR, May 04, 2009
http://www.realtor.org/press_room/news_releases/2009/05/march_phsi

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