After a contract to buy a home is signed, the sale is considered pending until it closes several weeks later. That's why pending home sales are considered a good indicator of future home sales. It's also why the National Association of Realtors tracks them from month to month. Since the vast majority of signed contracts lead to final sales, measuring pending sales offers a peek at where home sales are heading. According to the NAR's most recent Pending Home Sales Index, the market is heading upward. In fact, pending sales were up 1.6 percent in February from the month before.
Lawrence Yun, NAR's chief economist, says it's a sign the market is improving. “While modest sales growth might not stir excitement, it shows slow and steady progress from the lows of late last year,” Yun said. “Ongoing job gains are clearly increasing demand along with more inventory.” Results show the Midwest leading all regions, with a 10.6 percent jump in contract signings from the month before. The South also rose, with a 1.1 percent increase. The Northeast and West, on the other hand, saw declines.
[Source: NAR]
