The Pending Home Sales Index increased 3.5% in February to the highest level in seven months, and has increased year-over-year for 18 consecutive months. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), increased to 109.1 in February from a downwardly revised 105.4 in January, and was 0.7% above the same month a year ago.
The PHSI increased 11.4% in the Midwest and 2.1% in the South, while remaining essentially flat in the West and Northeast. Year-over-year, the PHSI increased 12.6% in the Northeast and 2.5% in the Midwest, while decreasing 6.2% in the West and 0.4% in the South.
Existing sales tumbled 7.2% in January. After several months of volatility, improving economic conditions and rising employment suggest a return to a steady recovery in existing sales. However, the long-term weakness among first-time buyers will continue to dampen all sales in 2016.