A Buyer’s Guide To The Pending Home Sales Index

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Hurt by foul weather and a soft market, the Pending Home Sales Index plunged 12 percent in April.

Projecting A Dismal Summer

The monthly index is published by the National Association of REALTORS® and measures the number of homes on which new contracts have been written.

It's the association's lone "forward-looking" report; meant to predict future, closed home sales. 80% of homes under contract close within 2 months. Based on the data, therefore, existing home sales should decline through June and July.

On a regional basis, "pending homes" varied. The Northeast Region posted growth. None others did.

• Northeast Region: +1.7% from March
• Midwest Region : -10.4% from March
• South Region : -17.2% from March
• West Region : -8.9% from March

But even regional data remains too broad to be useful to everyday buyers and sellers.

Local Markets May Have Fared Better

The housing market is local and that means that each block, of each street, in each city has its own market and economy. Grouping 9 states into a single "region" is neither helpful nor relevant.

We can't ignore the data entirely, however.

Housing is believed to be a key component in the nation's economic recovery. Fewer home sales retards growth, helps to push home prices lower, and can play a role is bringing mortgage rates down as well. This enhances home affordability for everyone.

Home affordability reached a record-high last quarter, and should do the same in this one. Buyers are drawn to favorable markets and this market is as favorable as they come.

Shop For Mortgage Rates Online With A Click

If you're in the market for a home, buyer conditions look good. You'll also need a mortgage approval.

To get a near real-time rate quote and see your payments, use my online mortgage rate form. It's no cost, no obligation, and you can see just how low your home payment can be with today's low rates.

(Post adapted from Bring the Blog, a blog service for loan officers and real estate agents)