pending home sales indicate market stabilizing

PENDING HOME SALES INDICATE MARKET IS STABILIZING

The latest pending home sales data tracked by NAR signal that the housing market is returning to more balanced conditions, according to a recent report.

In February, the Pending Home Sales Index (PHSI), which gauges home sales activity for upcoming months based on the number of transactions that have signed contracts but are not yet closed, decreased 5.2 percent to 117.7 from the reading one year earlier. February's PHSI also fell 0.8 percent from January's upwardly revised reading of 118.6.

An index of 100 or more generally indicates a high level of home sales activity."We can expect a historically strong housing market moving forward, earmarked by generally balanced conditions across the country and fairly stable levels of home sales with some month-to-month fluctuations," said NAR Chief Economist David Lereah.

"This normalization is healthy because it is taking a lot of the pressure off of the decision process for both homebuyers and sellers -- pressure that was driving abnormal rates of price growth across much of the country over the last few years."

The PHSI declined across the nation in February. On a regional basis, the PHSI was highest in the South, where it edged down 0.1 percent from one year earlier to 129.3.

In the West, the index fell 14.8 percent to 110.9.

The Midwest and Northeast regions also experienced annual declines, falling to 114.3 and 107.9, respectively.

**taken from the california association of realtors bulletin, dated april 6, 2006.