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What is The Pending Home Sales Index?
“The Pending Home Sales Index (PHS), a leading indicator of housing activity, measures housing contract activity and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. Because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing-Home Sales by a month or two.” (NAR)
March 2021 Pending Sales Index
After two months of seeing declines in the pending home sales, the index rose 1.9% to 111.3. Although there was a slight decrease in signings seen for two consecutive months, contract signings still experienced a 23.3% increase compared to March 2020. This increase was greatly affected by the lockdown induced by the pandemic.
This increase continues to show that there is high housing demand. And with jobs recovering and mortgage rates remaining on the historically lower side, this higher demand will remain strong. As explained by the National Association of Realtors ® chief economist Lawrence Yun, “low inventory has been a consistent problem, but more inventory will show up as new home construction intensifies in the coming months, as well as from a steady wind-down of the mortgage forbearance program.” And the projections made for the rest of 2021 remain strong – existing home sales rising 10% and median home prices rising 9%.
Pending home sales Grow 1.9% in March. (2021, April 29). Retrieved May 05, 2021, from https://www.nar.realtor/newsroom/pending-home-sales-grow-1-9-in-march