NAR Launches New Leading Indicator

The National Association of Realtors has announced the development of the Pending Home Sales Index, a new leading indicator for the housing market.The index is based on pending sales of existing homes, including single-family, condominium, and cooperative. A sale is deemed pending when the contract has been signed but the transaction has not closed, a period that typically lasts one or two months, the NAR said. The association said the index "promises to provide advance information 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." The index for January stood at 120.6, 2.1% below its level in December but 8.6% above that of a year earlier. "The Pending Home Sales Index tells us that home sales activity in the near term is expected to be historically high, but is trending off of peak levels recorded in 2004," said David Lereah, the NAR's chief economist. The association can be found online at http://realtor.org.