The Pending Home Sales Index posted 101.4 in March, a four percent gain from the month prior and the index’s highest reading since April 2010, when the home buyer tax credit expired.
A “pending home” is a home under contract to sell, but not yet closed. The Pending Home Sales Index is tracked and published by the National Association of REALTORS® every month.
The March report marks the index’s first 100-plus reading in nearly two years. To home buyers and sellers , this is statistically significant because the Pending Home Sales Index is normalized to 100, a value corresponding to the average home contract activity in 2001, the year the index was first published and an historically strong year for the housing market. Market activity for March is essentially on par with market activity in 2001.
Unlike most indices, which tell us how the things performed in the past, the Pending Home Sales Index gives us an idea how the housing market will perform in the future. Typically, 80% of homes under contract close within 2 months and many more close within 3 to 4 months. Therefore, based on the strength of the March Pending Home Sales Index, we could see a strong April and May in the housing market nationwide.
If you’re shopping for homes right now, consider taking advantage of the somewhat soft market to get yourself a great deal. Between low mortgage rates and home prices, it could be a great time to purchase a home. However, work with a great real estate who knows your market and do your homework. Many markets, such as Las Vegas and Phoenix, have limited inventory and a highly competitive environment.
A FHA loan offers great rates and a minimum of 3.5% down with reasonably decent credit. Fannie Mae conventional loans also offer great rates with a 3% down payment (for superior credit) or 5% down for good credit. Feel free to give me a call if you’d like me to crunch the numbers on a new home purchase loan.