Pending Home Sales Index Dips

The Pending Home Sales Index declined to 128.8 in September, 0.3% lower than the record high of 129.2 in August and 3.3% above that of a year earlier, according to the National Association of Realtors.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.) David Lereah, the NAR's chief economist, said the index indicates momentum in home sales. "We're still seeing a post-Katrina boost in homes sales activity, where the needs of displaced residents are supplementing a fundamentally strong market," Mr. Lereah said. "Aside from this temporary lift, the market is entering a period of transition in which we will see a somewhat slower but more sustainable pace of home sales -- a period that is expected to be historically healthy." An index of 100 is equal to the average level of contract activity in 2001, the first year for which the NAR has analyzed data.