Pending sales of existing homes dipped for the second straight month in January, according to a National Association of Realtors index.


Pending sales of existing homes dipped for the second straight month in January, according to a National Association of Realtors index.

The Pending Home Sales Index, based on purchase contracts signed but not yet closed, is considered to be a leading indicator for future sales. An index score of 100 is the average level of contract activity in 2001, the first year that index data was collected.

The index fell 2.8 percent month-to-month and 1.5 percent year-over-year in January, to 88.9.

Lawrence Yun, NAR’s chief economist, said in a statement, "We should not expect the recovery to be in a straight upward path — it will zig-zag at times."

The South was the only region to see a month-to-month index increase in January, up 1.4 percent to an index score of 97.7. The South also experienced the smallest year-over-year decline, -0.4 percent.

The index fell the most in the Midwest, dropping 7.3 percent month-to-month and 3.2 percent year-over-year, to 78. In the Northeast, the index fell 2.8 percent month-to-month and 1.5 percent year-over-year, to 73.5. In the West, the index fell 5.2 percent month-to-month and 0.9 percent year-over-year.

A new, recently released index from the California Association of Realtors indicated that pending sales in the state were up 13.6 percent month-to-month and down 2 percent year-over-year in January, boding well for the spring.

The latest economic forecast from the National Association of Realtors predicts the median price for existing homes will dip 0.4 percent in 2011, to $172,200, compared with a forecasted 0.5 percent rise in an earlier report.

NAR projects the median existing-home price to drop 3.9 percent in the first quarter of 2011 and 1 percent in the second quarter, followed by modest gains in subsequent quarters and a 3.2 percent increase in 2012.

Existing-home sales are expected to rise 8.1 percent this year, to 5.31 million, and 5.2 percent in 2012, to 5.58 million. Such sales rose for the third straight month in January, partially due to a jump in distressed property sales, investor purchases and all-cash deals.

After a sharp drop in new, single-family home sales nationwide in January, NAR predicts such sales will rise 5.2 percent, to 334,000, in 2011, a more modest increase than the 17.7 percent rise previously estimated. In 2012, new-home sales are estimated to climb 55.7 percent.

NAR projects the median price of new homes will rise 1.8 percent in 2011, to $226,000, followed by a 3.5 percent rise in 2012.

The association expects unemployment to fall from 9.6 percent in 2010 to 9.2 percent in 2011 and 8.4 percent in 2012. Real gross domestic product is expected to decrease to 2.7 percent this year from 2.9 percent last year, and then rise to 3 percent in 2012. The 30-year fixed mortgage rate is estimated to average 5.2 percent this year and rise to 5.9 percent in 2012.

"The broad fundamentals for a housing recovery are developing," Yun said. "Job growth, high housing affordability and rising apartment rent are conducive to bringing more buyers into the market. Some buyers may be looking to real estate as a hedge against potential future inflation."

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Did you miss Connect Now yesterday? Register now and get instant access to all the replays! Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription