Pending home sales increased in March and are well above a year ago, another signal the housing market is recovering, according to the National Association of RealtorsÂ®.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 4.1 percent to 101.4 in March from an upwardly revised 97.4 in February and is 12.8 percent above March 2011 when it was 89.9.Â The data reflects contracts but not closings.
The index is now at the highest level since April 2010 when it reached 111.3.
Lawrence Yun, NAR chief economist, said 2012 is expected to be a year of recovery for housing.Â â€œFirst quarter sales closings were the highest first quarter sales in five years.Â The latest contract signing activity suggests the second quarter will be equally good,â€ he said.
â€œThe housing market has clearly turned the corner.Â Rising sales are bringing down inventory and creating much more balanced conditions around the county, which means home prices will be rising in more areas as the year progresses,â€ Yun said.
The PHSI in the Northeast slipped 0.8 percent to 78.2 in March but is 21.1 percent above March 2011.Â In the Midwest the index declined 0.9 percent to 93.3 but is 16.9 percent higher than a year ago.Â Pending home sales in the South rose 5.9 percent to an index of 114.1 in March and are 10.6 percent above March 2011.Â In the West the index increased 8.7 percent in March to 108.0 and is 9.0 percent above a year ago.
The National Association of RealtorsÂ®, â€œThe Voice for Real Estate,â€ is Americaâ€™s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
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*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales.Â In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales; it coincides with a level that is historically healthy.
NOTE:Â Existing-home sales for April will be reported May 22, the next Pending Home Sales Index will be released May 30 and first quarter metro area home prices will be released May 9; release times are 10:00 a.m. EDT.
Information about NAR is available at www.realtor.org. News releases are posted in the websiteâ€™s â€œNews and Commentaryâ€ tab.Â Statistical data in this release, as well as other tables and surveys, are posted in the â€œResearch and Statisticsâ€ tab of www.realtor.org.
REALTORÂ® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORSÂ® and subscribe to its strict Code of Ethics.Â Not all real estate agents are REALTORSÂ®.Â All REALTORSÂ® are members of NAR.