The Pending Home Sales Index — a leading indicator for the housing market — was up 1.3 percent in May, indicating a “leveling off” of the market, according to a report released today by the National Association of Realtors.
“The slight change in pending home sales indicates the market is beginning to level out,” said David Lereah, chief economist for the National Association of Realtors. “This is consistent with our forecast, which is showing a soft landing for the housing sector.”
A pending sales index of 100 is equal to the average level of contract activity during 2001, the first year the index was measured and the first of five straight record-breaking years for home sales. A sale is considered pending if the contract has been signed but the transaction hasn’t closed. The index was at 113.4 in May, up from April’s 111.9. However, May’s index was about 10 percent lowerthan May 2005.
The national figures are on par with local ones. For example, the Northern Virginia Association of Realtors — which doesn’t specifically track pending sales — reported overall home sales were up in May from the previous month, but still down from the prior year. Sales of single family home increased by 16 percent from April to May but were down by about 33 percent from May of last year.
But it’s important to note spring is the most popular time for home sales and that may account for increased sales, said Jill Landsman, a spokesman for NVAR. Pending sales are likely up, she said, because contingency contracts have increased as the market cools.
AROUND THE COUNTRY
» Pending sales in the Western part of the country were the primary driver pushing the index up. The index in that region was 110.1 in May. In the Northeast, the index dropped 0.6 percent in May, while in the South it fell 1.7 percent. The Midwest rose 0.6 percent.
Source: National Association of Realtors
