The Pending Home Sales Index, a forward-looking indicator based on contracts signed, increased 2.0 percent to 97.0 in January, up from the downwardly revised 95.1 in December. The January 2012 level is up 8.0 percent from the same period one year ago. The National Association of Realtors (NAR) reported that all four regions are up from January 2011.
If contracts closed at the same time they were signed, this graph would be the correspondence between sales and the PHSI. So the PHSI is a good indicator of what is likely to happen with existing home sales which are the contract closings. We anticipate that existing sales that will be reported on March 21, 2012, will reflect the closing of contracts signed and driving today’s PHSI.