Year Starts Off Moving in Right Direction

Even though last month noted a drop in pending home sales, more Americans signed contracts to buy homes in February than they have in nearly two years.
And the Chicago real estate region led the way.
sign that says contract pending outside a home.The National Association of Realtors® Pending Home Sales Index for February slipped 0.5 percent to 96.5 from the previous month. January’s index of 97 was the highest level since April of 2010.
February’s index is 9.2 percent above its level during February of 2011 when it was 88.4.
The Pending Home Sales Index (PHSI) can predict future activity because it’s based on contract signings, not closings, which generally come about a month or two after. Existing-home sales accounted for approximately 93 percent of all home sales last year.
Lawrence Yun, NAR chief economist, said that if the first two months of 2012 are any indicator of this year’s outcome, home sales should rise 7 to 10 percent.
“The spring home buying season looks bright because of an elevated level of contract offers so far this year,” said Yun. “If activity is sustained near present levels, existing-home sales will see their best performance in five years.”
Our region was the main reason February’s index remained at its level. The Midwest was the only segment of the country to post an increase in pending home sales last month:
*Midwest: The PHSI surged 6.5 percent in February to 93.8 and is 19.0 percent higher than February 2011.
*Northeast: The index eased 0.6 percent to 77.7 in February but is 18.4 percent above a year ago.
*South: Pending home sales fell 3.0 percent to 105.8 but are 7.8 percent above a year ago.
*West: The index declined 2.6 percent last month to 99.3 and is 1.8 percent below February 2011.
Keep signing those contracts, homebuyers!