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The National Association of Realtors (NAR) said its index of pending home sales -- which measures signed purchase agreements in the United States -- fell 1.9 percent month-over-month, though recovery is possible in the second half of 2008.
Pending home sales in February fell 4.9 percent month-over-month to 84.6, following an upwardly revised figure of 86.2 in January. The Pending Home Sales Index is a forward-looking indicator based on contracts signed. The February figures still are 21.4 percent lower than the February 2007 index of 107.6.
“Existing-home sales could start to show a sustained increase within a few months, unless there are some additional economic problems or excessive inflationary pressure,” said Lawrence Yun, chief economist for the NAR. “We’re looking for essentially stable sales in the near term, before higher mortgage loan limits translate into more sales in high-cost markets. The wider access to affordable credit should increase sales activity notably this summer as pent-up demand begins to be met.”
Regionally, pending sales rose 3.2 percent in the Northeast and 2.1 percent in the West. The index fell 3.7 percent in the Midwest and 5.5 percent in the South.
Existing-home sales are likely to rise from an annual pace of 4.9 million in the first quarter to 5.9 million in the fourth quarter, according to predictions from the NAR. With relatively weak activity in the first part of the year, existing-home sales for all of 2008 are forecast at 5.39 million, increasing 6.6 percent to 5.74 million in 2009. The price of existing homes will probably ease by 1.4 percent to a median of $215,800 for all of 2008 before rising 3.7 percent to $223,800 next year, the group said.
“Exceptionally weak home sales related to jumbo loans problems will depress home prices in the first half of the year, but steady liquidity improvements in the conforming jumbo-loan market will help prices recover in the second half of the year,” Yun said.