The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January 2010, fell 7.6% to 90.4 from an upwardly revised 97.8 in December, but remains 12.3% higher than January 2009 when it was 80.5.
Lawrence Yun, NAR chief economist, said weather is likely to impact housing data. “January pending sales, though still higher than one year ago, remain much lower than expected given that a large number of potential buyers are eligible for the expanded home buyer tax credit. Moreover, the abnormally severe and prolonged winter weather, which affected large regions of the U.S., hampered shopping activity in February,” he said.
As such, abnormal swings are expected in housing data. “We will see weak near-term sales followed by a likely surge of existing-home sales in April, May and June,” Yun said. “The real question is what happens in the second half of the year. If there is sufficient job creation, housing can become self-sustaining with stable to modestly rising home prices because inventory has been trending downward.”
The PHSI in the Northeast fell 8.7% to 71.3 in January but is 20.5% higher than January 2009. In the Midwest the index dropped 8.9% to 81.2 but is 11.8% above a year ago. Pending home sales in the South slipped 2.1% to an index of 98.1, but the index is 18.0% higher than January 2009. In the West the index dropped 13.2% to 102.9 but is 1.4% above a year ago.
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