An index that tracks pending home sales fell for the third consecutive month in April, the National Association of Realtors reported, dropping 3.7 percent since March and 11.7 percent since April 2005.

The Pending Home Sales Index, which is based on pending sales of existing homes, was 111.8 in April 2006. A sale is listed as pending when the contract has been signed and the transaction has not closed, but the sale usually is finalized within one or two months of signing, the association reported. The level of monthly sales-contract activity from 2001 through 2004 has been shown to parallel the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined, and was the first of five consecutive record years for existing-home sales.

The association also noted that the index is based on a large national sample and typically represents about 20 percent of transactions for existing-home sales.

David Lereah, NAR’s chief economist, said in a statement, “When some measures are up and others are down, it tells us that we’re in a period of transition. Pending homes sales probably give us the best measure for the overall direction of the housing market, which is falling from historical highs,” he said. “I see this time of adjustment as being a trough in home sales that will more or less level out toward the end of the year. Over time, home ownership remains the best investment a family can make.”

Regionally, the index in the South rose 1.4 percent in April to 129.4 and was 5.7 percent below April 2005. In the Northeast, the index fell 5.5 percent in April to 106.7 and was 9.3 percent below a year ago. The index in the Midwest declined 5.6 percent to 100.3 in April and was 16.6 percent lower than April 2005. The index in the West dropped 9.8 percent to 100.2 in April and was 19 percent below April 2005.

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