Pending Home Sales Increase in March
Although market activity in regards to home sales has been notably low in recent months, sales figures showed that pending home sales increase in March. The National Association of Realtors has called attention to the fact that this marks the first time in nine months that home sales have risen.
The Pending Home Sales Index is a major market indicator that has attested to a recent rise in home sales. This forward-looking index has shown using data from contract signings that home sales have risen 3.4 percent since February. However, the Index still shows less activity in home sales than that which was recorded in March of 2013, when the Pending Home Sales Index reported 105.7 as opposed to the 97.4 figure from this March.
According to Lawrence Yun of the National Association of Realtors, a gain in home sales was highly predictable after the very stagnant home sales market that was seen over the winter. Yun has attributed the auspicious rise in home sales this past March to increased inventory on the market and a nationwide increase in job creation in recent months.
While the Pending Home Sales Index has shown an overall increase, it shows an unequal distribution in increases in home sales in different regions of the country. While the Index increased in the Northeast, a decrease was recorded in the Midwest of the country. Pending home sales showed a rise in both the South and the West, but they are still below the Index value of last year.
It is estimated that even if pending home sales increase in March, home sales in 2014 are unlikely to reach figures of 2013 due to a slow start early this year. According to estimates, sales on existing homes should come to slightly more than $4.9 million in 2014. This is down from $5.1 million last year. While home sales are expected to drop slightly in 2013, the overall median price on existing homes should increase by around 6 or 7 percent.
An important indicator in the home sales market, the Pending Home Sales Index records the state of sales that are in process on existing homes. The Index values are determined from data extracted from a large sample of existing-home sales across the country. A pending sale is considered to be a sale for which a contract has been sign but the resulting transaction has not been closed.