Due to low interest rates and an $8,000 tax credit for first-time home buyers, pending home sales have gone up for the third month in a row.
It varies greatly from one area of the country to another, here in the West the Pending Home Sales Index rose 1.8%, to 94.8, but is 2.9% below a year ago. A pending home sale is a contract for a home sale that has been signed but the home sale has not closed yet.
Total number of existing-home sales is expected to improve in general but some corners of the United States have already bottomed out and started to recover while others are still falling slowly.
Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future existing-home sales.
It has noted that pending sales have increased, which is a sign that we're moving in the right direction, but that we are still drastically below where we were at the peak of the market. We probably should not be comparing our numbers to the peak of the market though. That was just the extreme the other way and ideally we'd like to be plain ol' steady.