PENDING HOME SALES INDICATE STEADY MARKET IN COMING MONTHS

From CAR, 11/01/06:

Home sales will remain stable in the months ahead, according to NAR's most recent Pending Home Sales Index (PHSI). In September, the PHSI stood at 109.1, down 1.1 percent from the previous month and down 13.6 percent from September 2005. The index gauges home sales activity for upcoming months based on the number of transactions that have signed contracts but are not yet closed. A PHSI of 100 or more generally indicates a high level of homes sales activity.

"The present level of home sales is relatively high in historic terms, and we can
expect generally minor movements around this level. We don't expect to see any changes of note until early next year when we're likely to see a modest lift to home sales," said NAR Chief Economist David Lereah. "The market currently is a little lower than expected as buyers try to time their entry. In the meantime, there's some buildup in demand that will move when consumers realize that conditions are optimal for them."

The PHSI declined across the nation in September compared with the readings a year ago. On a regional basis, the PHSI was highest in the South, where it declined 9 percent to 125. In the West, the index fell 15.2 percent to 112.5. The PHSI also declined in the Midwest and Northeast regions, falling to 96.4 and 89.9, respectively.