Realtors all over the country have begun to noticed an increase in the number of pending home sales over the past couple of months. To many experts, this could signal a bottom, and the start to a rise, in housing market. Experts also believe that this rise is largely a response to the extended tax credit.
The Pending Home Sales Index is a number that serves great importance when taking into account the nations overall housing market strenght. A sale is considered pending when a buyer enters into a contract, but the sale has not closed. Typically, the sale will take a month or two to close. This index is based on a sample of the total home sales in the country. The index usually represents around 20 percent of the total home sales. It is used to demostrate sales activity for any given month.
In February, the index rose 8.2 percent from January to 97.6. The number remains 17.3 percent above February of last year, which was 83.2.
Lawrence Yun, NAR chief economist, said the improvement is another hopeful sign. “The rise in buyer contact activity may signal the early stages of a second surge of home sales this spring. The healthy gain hints home prices are continuing to flatten,” he said. “We need a second surge to meaningfully draw down inventory and definitively stabilize home values.”