Pending Home Sales Index Shows Stability

The recent month-to-month increase in pending home sales is a sign that the housing market is beginning to level out, according to a recent report from NAR.

In May, 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, increased 1.3 percent to 113.4 from the reading one month earlier. The May 2006 PHSI declined 10.1 percent from a level of 126.1 reported during May 2005. An index of 100 or more generally indicates a high level of home sales activity.

The PHSI declined across the nation in May compared with the reading a year ago. On a regional basis, the PHSI was highest in the South, where it edged down 7.3 percent to 127.5.

In the West, the index fell 12.9 percent to 110.1. The PHSI also declined in the Northeast and Midwest regions, falling to 106.1 and 100.9, respectively.

**Taken from the California Association of Realtors Bulletin,
dated July 12, 2006.