RISMEDIA, May 5, 2010—Pending home sales increased again in March
2010, affirming that a surge of home sales is unfolding for the spring
home buying season, according to the National Association of Realtors®.
The Pending Home Sales Index (PHSI) forward-looking indicator based on
contracts signed in March, rose 5.3% to 102.9 from 97.7 in February, and
is 21.1% above March 2009 when it was 85.0; this follows an 8.3%
increase in February. The data reflects contracts and not closings,
which usually occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said favorable affordability
conditions have been working with the tax credit. “Clearly the home
buyer tax credit has helped stabilize the market. In the months
immediately following the expiration of the tax credit, we expect
measurably lower sales,” he said. “Later in the second half of the year,
and into 2011, home sales will likely become self-sustaining if the
economy can add jobs at a respectable pace, and from a return of buyer
demand as they see home values stabilizing.”

The PHSI in the Northeast declined 3.3% to 75.1 in March but remains
27.2% higher than March 2009. In the Midwest the index increased 1.2% to
98.9 and is 18.5% above a year ago. Pending home sales in the South
jumped 12.7% to an index of 121.2, which is 28.3% higher than March
2009. In the West the index rose 1.9% to 99.9 and is 8.8% above a year ago.

“Another encouraging sign is the improvement in the availability for
jumbo and second-home mortgages,” Yun said. “As bank balance sheets
strengthen, it is just a matter of time before lending of
non-government-backed mortgages steadily opens up.”

The National Association of Realtors, “The Voice for Real Estate,” is
one of America’s largest trade associations, representing 1.1 million
members involved in all aspects of the residential and commercial real
estate industries.

The Pending Home Sales Index is a leading indicator for the housing
sector, based on pending sales of existing homes. A sale is listed as
pending when the contract has been signed but the transaction has not
closed, though the sale usually is finalized within one or two months of
signing.

The index is based on a large national sample, typically representing
about 20% of transactions for existing-home sales. In developing the
model for the index, it was demonstrated that the level of monthly
sales-contract activity parallels the level of closed existing-home
sales in the following two months. There is a closer relationship
between annual index changes (from the same month a year earlier) and
year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity
during 2001, which was the first year to be examined as well as the
first of five consecutive record years for existing-home sales.

For more information, visit www.realtor.org ^[2] .

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