Pending Home Sales Tumble 7.7%

Source: Wall Street Journal Online
By: Meena Thiruvengadam
Posted: March 3, 2009

WASHINGTON — A forecasting gauge of housing-market activity fell more than twice as much as was expected in January as some buyers held off on home purchases.

The National Association of Realtors’ index for pending sales of previously owned homes dropped 7.7% to 80.4 in January from 87.1 in December, the industry group said Tuesday.

Private analysts surveyed by Dow Jones Newswires had expected pending sales would fall 3.5%.

The pending home sales index in January was 6.4% lower than the 85.9 it was in January 2008, and the NAR index is at its lowest level since tracking began in 2001.

“Even with many serious potential home buyers on the sidelines waiting for passage of the stimulus bill, job losses and weak consumer confidence were a natural drag on home sales,” Lawrence Yun, NAR’s chief economist, said. “We expect similarly soft home sales in the near term, but buyers are expected to respond to much-improved affordability conditions and from the $8,000 first-time buyer tax credit.”

The NAR on Tuesday also revised its pending home sales index for December downward. The index rose 4.8% in December instead of the initially estimated 6.3% increase, the group said.

The NAR index is based on pending sales of existing homes, including single-family homes and condominiums. A home sale is pending when the contract has been signed but the transaction hasn’t closed. Pending sales typically close within one or two months of signing.

By region, seasonally adjusted pending sales in the Northeast dropped 12.7% in January from December; they were down 19.7% since January 2008. Midwest activity fell 9.2% in January from December; it has fallen 13.8% since January 2008. Activity in the South fell 11.9% in January from December; it has fallen 9.1% since January 2008. In the West, pending sales rose 2.4% in January from December; they’re up 13.5% since January 2008.

The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale. All information is derived from the Palm Beach County Property Appraisers website and the MLS.