The National Association of Realtors reported this morning (March 6) that its Pending Home Sales Index, based on sales contracts for existing single family homes on a seasonally adjusted basis, fell 4.1% in January compared to December 2006 and 8.9% from January, 2006.
The organization attributed the drop mostly to poor weather in many parts of the country. Regionally, the index was own 9.3% in the Northeast vs. December and 1.3% vs. last year; down 2.4% and 10.8% respectively in the Midwest; down 11.7% and 11.8% respectively in the South; and down 0.2% and 7% respectively in the West. SEE THE ENTIRE INDEX
"We are seeing temporary near-term weather disruptions in much of the country, but there is an underlying pattern of stabilization in the housing market," said David Lereah, NAR's chief economist. "As a result of these weather disruptions, it may take a couple months for the picture to fully clarify, but a modest recovery is likely. Housing remains a great long-term investment."
The PHSI for December, which was characterized by mild weather, was up 4.5% from November, the largest monthly gain in nearly three years.
The seasonally adjusted index was 108.7 for January, 101.8 in the Northeast, 100.1 in the Midwest, 116.7 in the South and 110.8 in the West. The index is based on the number 100, which was set as the benchmark for average activity in 2001, when the index was created. SEE THE ENTIRE RELEASE
The Building Research team at J.P Morgan Securities viewed the NAR report in a very positive light. In a research note sent to investors shortly after the Index numbers were released, the team stated, "We note that while the YOY decline of 8.9% was above December's -3.7%, it still continues to be below double-digit YOY declines from April-November and October's peak of -14.7%. Accordingly, we continue to believe a trough in the housing market is emerging, and reiterate our positive sector stance."