The Pending Home Sales Index, a forward-looking indicator based on signed contracts, decreased 1.4 percent in June 2012 to 99.3 from a downwardly revised 100.7 in May. At this level, the June 2012 PHSI was 9.5 percent higher than the same period a year ago.
The National Association of Realtors (NAR) reported that the June PHSI was up 2.6 percent in the West, and down in the other three regions from last month. Compared to the same period a year ago, the PHSI was up in all four regions. The year-over-year increases were 12.2 percent in the Northeast, 17.3 percent in the Midwest, 8.8 percent in the South and 3.0 percent in the West. The 7.6 percent monthly PHSI decline in the Northeast followed yesterday’s reported noticeable decline in new home sales in the Northeast.
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 when the contracts close in coming months. We anticipate that July and August existing sales that will be reported on August 22, 2012 and September 19, 2012, will reflect today’s pending sales report.