The Pending Home Sales Index is a report which is based on signed contracts during a month. October reports an index reading of 107.2. The NAR reports that the index displays a narrowing trend as the previous year figures show the decline is less then in September (13.6% below) and August 2006 (14.0% below).
The NAR's chief economist reports that the current numbers indicate a stabilizing market. Furthermore, comparisons with the previous "Boom" market are overshadowing the fact that sales of homes remain at an historic highpoint, and that the number of home sales for 2006 will go on record as the third highest year on record.
A home sale is listed as pending when the initial contract is signed and "accepted", but not yet closed. Pending sales usually close within a one or two-month period.
An index rating of 100 is the same as the average level of pending sale activity in 2001, which was the first year to be monitored as well as the first of a five-year timeframe of the monitoring of pending sales.
The Pending Home Sales Index in the Midwest dropped 0.6% in the month of October to 95.8, making it 15.4% below 2005 index ratings. In the South, the index rating went down 1.7% to 122.9, showing a drop of 9.3% compared to October 2005. The Northeast fell a smaller 2.1% in the month of October to a reading of 88.0, showing a drop of 13.5% compared to the previous year. Index ratings in the West went down 2.7% to ratings of 109.5 and resulted in a previous year difference of -17.4%.
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