Pending Home Sales Drop a Slight 0.5 Percent in February

Pending home sales were down slightly in February, but remain above the pattern in the first half of 2011, according to the National Association of Realtors (NAR). The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, eased 0.5 percent to 96.5 in February from 97.0 in January but is 9.2 percent above February 2011 when it was 88.4. The data reflects contracts but not closings. “The spring homebuying season looks bright because of an elevated level of contract offers so far this year,” said Lawrence Yun, NAR chief economist. “If activity is sustained near present levels, existing-home sales will see their best performance in five years. Based on all of the factors in the current market, that’s what we’re expecting with sales rising seven to 10 percent in 2012.” The PHSI in the Northeast slipped 0.6 percent to 77.7 in February but is 18.4 percent above a year ago. In the Midwest, the PHSI jumped 6.5 percent to 93.8 and is 19.0 percent higher than February 2011. Pending home sales in the South fell three percent to an index of 105.8 in February but are 7.8 percent above a year ago. In the West, the PHSI declined 2.6 percent in February to 99.3 and is 1.8 percent below February 2011.