Tuesday, April 03, 2007

Pending Home Sales: February 2007

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for February 2007 showing continued year-over-year declines in every region.

Additionally, the Northeast has fallen back below 100 indicating that February’s home sales activity was BELOW the average activity recorded in 2001, the first year Pending Home Sales were tracked.

According to David Lereah, Chief Economist of NAR, the declines are as a result of bad weather and sub-prime slime:

“If it wasn’t for the unusually bad weather in February, we’d be seeing a better performance in pending home sales, … We also may be seeing some fallout from a decline in subprime lending, but a slight improvement in the more volatile month-to-month index is encouraging – the data suggests an underlying stabilization is taking place in the housing market, but it will take another month or two to clarify. Problems in the subprime mortgage market will become more apparent over time, and they will modestly depress the overall level of improvement in existing-home sales we expect as the year progresses,”

As usual, Lereah is having a hard time just accepting that sales are continuing to slide even on a year-over-year basis on top of last years historic fall-off.

Looking more closely at the results one might draw a less optimistic conclusion:

  • Nationally the index was down 8.5% as compared to February 2006.
  • The Northeast region was down 8.2% as compared to February 2006.
  • The West region was down 8.2% as compared to February 2006.
  • The Midwest region was down 9.7% as compared to February 2006.
  • The South region was down 8.0% as compared to February 2006.
So it appears that, year-over-year, contract activity is still dropping rather with ALL regions continuing to show significant declines.

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