Pending Home Sales Index Up Moderately, Still Low

posted on October 5th, 2010 filed under: Real Estate Market Data

The Pending Home Sales Index from the National Association of Realtors rose moderately for August 2010, but remain historically low.  The chart below shows the seasonally-adjusted annual rate (SAAR).

Pending Home Sales Index (NAR) -- August 2010 -- Chart, Graph

The depressed level of sales is obviously a result of the $8,000 government handout, which borrowed sales from the future.  But it is constructive that sales continue to advance off the low established in June.  If the government refrains from additional short-term incentives, future gains would be organic and credible.

Sales are counted as pending when contracts are signed.  A level of 100 corresponds to the average volume of contract signings in the year 2001.  The NAR notes that 2001 was the first of four consecutive record-breaking years of home sales — a disclaimer that seeks to excuse recent poor performance put the current numbers in perspective.

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