• In January, NAR's Pending Home Sales Index declined 2.8 percent to 106.4 down from an upwardly revised 109.5 in December.
  • This month, the PHSI is 0.4 percent above January 2015 -- but it's still the lowest index since then.

The real estate roller coaster continues as the National Association of Realtors‘ (NAR) Pending Home Sales Index (PHSI) slides to its lowest level in a year.

“The significant shortage of listings last month along with deteriorating affordability as the result of higher home prices and mortgage rates kept many would-be buyers at bay,” said NAR Chief Economist Lawrence Yun in a statement.

“Buyer traffic is easily outpacing seller traffic in several metro areas and is why homes are selling at a much faster rate than a year ago. Most notably in the West, it’s not uncommon to see a home come off the market within a month.”

January’s PHSI decreased 2.8 percent to 106.4, and despite being 0.4 percent higher than January 2015, is the lowest index seen in a year. Last month’s numbers are also down from an upwardly revised 109.5 PHSI for December.


Regional outlook

The PHSI in the Northeast rose to 98.7 and is 3.6 above a year ago.

In the Midwest, the index declined to 99.5, and is now 3.8 percent lower than January 2015.

Pending home sales in the South rose to an index of 122.5 — a 0.4 percent month-over-month and 2.0 percent year-over-year increase.

The West experienced the biggest loss with an index of 94.6 — a 9.8 percent month-over-month and 0.4 percent year-over-year decrease.

Price appreciation vs. income growth

Yun says the health of the 2017 housing market will continue to be dependent on borrowing costs, consistent job growth, affordable home prices and more inventory.

“January’s accelerated price appreciation is concerning because it’s over double the pace of income growth and mortgage rates are up considerably from six months ago,” said Yun.

“Especially in the most expensive markets, prospective buyers will feel this squeeze to their budget and will likely have to come up with additional savings or compromise on home size or location.”

NAR uses a large national sample of signed residential property sale contracts to build its monthly pending home sales index. The sample size typically represents about 20 percent of transactions for existing-home sales.

The index level was benchmarked to 100 in 2001, which was the first year to be examined. Existing-home sales in 2001 were in the 5 million to 5.5 million range, which is considered normal for the population in the U.S.

Email Marian McPherson

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
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.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