Pending Home Sales
Flat in January

A forward-looking indicator of existing-home sales held steady in January, surprising forecasters predicting another decline.

The National Association of Realtors' index for pending sales of previously owned homes was unchanged at 85.9 in January from December, the industry group said Thursday.

Private analysts projected pending sales would fall by 1.5%. The NAR saw the flat reading as a sign of a stabilizing market.

"Our members are telling us there's been a pickup in shopping activity," NAR's chief economist, Lawrence Yun said. "Our hope is that the increased traffic of buyers looking at homes will translate soon into more contract offers."

Mr. Yun sees home sales climbing later this year. Buyers are waiting for higher loan limits, he said.

"The higher loan limits for both FHA [Federal Housing Administration] and conventional loans will increase consumer choice and provide greater access to lower interest rate mortgages in high-cost regions," he said. "Therefore, a notable rise in home sales can be anticipated in the second half of the year."

In its monthly forecast on the industry, the NAR projected existing-home sales at 5.38 million this year and 5.60 million in 2009. That compares with 5.65 million in 2007. Existing-home prices are expected to fall 1.2% to a median of $216,300 for all of 2008 and rise 3.5% to $223,800 in 2009, the NAR said.

A month ago, NAR projected 2008 sales at 5.38 million.

The NAR pending sales index, based on signed contracts for previously owned homes, was 19.6% below the level of 106.8 in January 2007.

The NAR's pending home sales index was designed to try measuring which way the housing market is going in the future. It is based on pending sales of existing homes, including single-family homes and condominiums. A home sale is pending when the contract has been signed but the transaction hasn't closed. Pending sales typically close within one or two months of signing.

By region, the Northeast decreased 4.1% in January from December; it fell 28.0% since January 2007. The Midwest rose 0.6% in January from December; it tumbled 13.3% since January 2007. The South decreased 6.1% in January from December; it dropped 23.8% since January 2007. The West rose 13.0% in January from December; it declined 12.7% since January 2007.

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