The National Association of Realtors on Monday released the first of a new series of home sales data which it says could well become the favoured leading index of the housing market. The Pending Home Sales Index (PHSI) provides advance news on future home-sales activity and offers more solid information on changes in the direction of the market than any of the indicators currently available, NAR said in a press release.
The Pending Home Sales Index, based on data collected for January, stood at 120.6, which was 2.1 percent below December but 8.6 percent above January 2004.
The index is based on pending sales of existing homes, including single-family, condo and co-op. A home sale is pending when the contract has been signed but the transaction has not closed. Pending sales will typically close within one or two months of contract signing.
David Lereah, NAR's chief economist, said the level of contract activity in January offers a sense of the direction for existing-home sales in February and March.