The National Association of Realtors Pending Home Sales Index jumped 6.3% in December as strong gains in the Midwest and South eclipsed declines in the Northeast and West.
The index stood at 87.7 in December, up from an upwardly revised reading of82.5 in November and 2.1% above December, 2007. Separately, the NAR¹s Housing Affordability Index rose 10.9% in December to 158.8, the highest since the series began in 1970.
"Significant uncertainty still clouds the housing market despite improved affordability conditions," said Lawrence Yun, the NAR's chief economist."For a sustainable housing market recovery and, hence, sustainable economic recovery, we need a significant housing stimulus and mortgage availability for qualified borrowers."
The PHSI in the Northeast slipped 1.7% to 62.1 in December and is 14.5% below a year ago. In the Midwest the index jumped 12.8% to 83.7 but remains 1.2% below December 2007. The index in the South surged 13.0% to 96.8 in December and is 1.6% above a year ago. In the West, the index fell 3.7% to97.5 but remains 17.5% higher than December 2007.
Yun repeated the Realtors' call for housing-related stimulus measures."Although Congress and the Obama administration are taking steps to help the economy, the stimulus package must deal with the root cause of the economic downturn, and apply the right fix to turn it around," he said. "If housing is ignored, a significant downward overshooting of home prices would continue to drag the economy down independent of the scale of the stimulus."
The PHSI, based on signed contracts, is a forward looking indicator of home sales for the next two to three months.