The pending home sale index (PHSI), a forward-looking indicator based on contract signings, dropped 1 percent from January to February to 101.9 and was down 4.9 percent year-over-year, according to the latest data from the National Association of Realtors (NAR).

The year-over-year decrease marks the 14th straight month of annual declines.

Despite the dip, last month’s 5 percent month-over-month uptick makes this month’s slight decline less concerning, according to Lawrence Yun, the chief economist at NAR.

“In January, pending contracts were up close to 5 percent, so this month’s 1 percent drop is not a significant concern,” Yun said. “As a whole, these numbers indicate that a cyclical low in sales is in the past but activity is not matching the frenzied pace of last spring.”

Regionally, the PHSI in the northeast dropped 0.8 percent month-over-month and 2.6 percent year-over-year to a level of 92.1. In the Midwest, the index dropped 7.2 percent month-over-month and 6.1 percent year-over-year to 93.2. The PHSI rose 1.7 percent month-over-month to 121.8 in the South, but was down 2.9 percent year-over-year.

The lowest region for pending home sales was the West, which rose slightly by 0.5 percent month-over-month to 87.5, but was still down 9.6 percent below last year’s level.

“There is a lack of inventory in the West and prices have risen too fast,” Yun said. “Job creation in the West is solid, but there is still a desperate need for more home construction.”

The PHI is an index based on pending sales of existing homes. The index is based on a large national sample, according to NAR, typically representing about 20 percent of transactions for existing home sales.

For the purpose of the index, a score of 100 is equal to the average level of contract activity during 2001, the first year NAR began compiling home sales. Existing home sales fell within a range of 5 million to 5.5 million that year, which is considered normal for the current U.S. population.


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