Home purchase contract signings slowed in March although they remained slightly above February levels and well above contract signings one year earlier. The National Association of Realtors® (NAR) Pending Home Sales Index (PHSI) released this morning showed the contract activity in March was up 1.5 percent in March to 105.7 compared to a downwardly revised (from 104.8) 104.1 in February. The original February index was already down 0.5 percent compared to January.
The current PHSI is 7.0 percent above the index in March 2012 of 98.8. March was the 23rd month in which the index was above the level of the same period the previous year.
The PHSI is a forward-looking indicator based on contract signing. The index base of 100 is equal to the average level of contract activity during 2001, the first year to be examined. A pending sale is generally expected to close within one to two months.
Lawrence Yun, NAR chief economist, said the market appears to be leveling off. "Contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply. Little movement is expected in near-term sales closings, but they should edge up modestly as the year progresses," he said. "Job additions and rising household wealth will continue to support housing demand."
NAR expects existing home sales to increase 6.5 to 7 percent in 2013 compared to 2012 which would translate to nearly 5 million sales. The national median existing-home price is projected to rise about 7.5 percent.
Pending sales in the Northeast were unchanged from February at 82.8, a 6.3 percent increase on an annual basis. The index in the Midwest was up 0.3 percent to 103.8, 13.7 percent higher than in March 2012. The South saw contract signings increase 2.7 percent month-over-month to 120.0, 10.4 percent higher than the previous year. The index for the West increased 1.5 percent to 102.9 but declined 4.3 percent year-over-year.
