Pending home sales index down, NAR says

After a flurry of activity to beat the original November first-time homebuyer tax credit deadline, fewer home sale contract signings were seen in November, according to the National Association of Realtors’ Pending Home Sales Index, which charts the number of pending home sales nationwide each month. Although November 2009’s index rating of 96 is still 15.5 percent higher than November 2008’s 83.1 rank, the score marks a 16 percent drop month-over-month. But while this drop in pending home sales activity is noteworthy, this drop was expected, according to Lawrence Yun, chief economist with NAR, due to the first-time homebuyer tax credit. Market-watchers can expect the same surge and decline pattern when the new first-time homebuyer tax credit deadline — April 30 — approaches, Yun said, adding that the index’s strength in year-over-year figures is a more accurate indicator of where the market is headed. “The fact that pending home sales are comfortably above [last year’s] levels shows the market has gained sufficient momentum on its own.” TRD