The National Association of REALTORS® Pending Home Sales Index rose for the third straight month last month. What does it mean for you?
A rising pending homes sales index means there a lot of buyers in the market. With fewer homes being built, and a growing population, this means greater demand Greater demand means higher home prices due to more competition!
If asking the seller for closing costs, you may find it more difficult to get an offer accepted……that’s why you should consider a closing or down payment assistance program to help get your offer accepted.
A “pending home sale” is a home under contract to sell, but not yet closed.
The Pending Home Sales Index rose 5 percent in March, posting its second-highest reading since April 2010. Not coincidentally, that month marked the expiration of last year’s federal home buyer tax credit.
Home buyers and sellers in the Inland Empire’s Riverside and San Bernardino county would do well to watch the Pending Home Sales Index each month. This is because — unlike most government and private data — the Pending Home Sales Index is a “forward-looking” indicator.
Because 80% of “pending” homes close within 2 months, and a significant share of the rest close within months 3 and 4, the Pending Home Sales Index tends to correlate to future strength (or weakness) in housing.
The Pending Home Sales Index, in other words, is an excellent precursor to the Existing Home Sales report, issued monthly.
By region, the Pending Home Sales Index varied last month.
- Northeast : -3.2% from February
- Southeast : +10.3% from February
- Midwest : +3.0% from February
- West : +3.1% from February
All 4 regions were worse from a year ago….but it’s rising again.
As with everything in housing, we must remember that real estate is neither national, nor regional. It’s local. Sales volume may be higher in areas like the Midwest, but that doesn’t mean that all Midwest markets are experiencing similar gains, if any gains at all.
To get local real estate data for Temecula/Murrieta/Menifee, the Corona/Riverside/Moreno Valley, or the San Bernardino/Rancho Cucamonga areas, talk to a real estate agent that specializes in that area. It’s the best way to know what’s happening on the street level.
If you want a referral of an agent I think is one of the best too work with in an area you are interested in buying, give me a call or shoot me an email brad(at)homeloanartist(dot)com.