I realize I'm not making friends with the Realtors by trouncing their index today, but I have to say honestly: I've read an awful lot of National Association of Realtorreports in my time on the housing beat (five years+), and never before have I seen them express so much skepticism in such a positive report. Remember, so many of you in the blogosphere refer to the NAR as the "shills" for the industry, which I supposed is what they're paid to be. But I digress.
This month's Pending Home Sales Indexfrom the NAR rose 6.4 percent month to month and is now up for seven straight months. The index measures contracts signed on homes, and is therefore considered a forward-looking indicator for closings, which are final sales and which comprise the Existing Home Sales report each month. So given a two-month lag time from contract to closing, you would expect that the Pending index would mirror the Existing sales numbers, that is, August Pendings would equal, give or take a few, October's Existings. The trouble is we are not in a normal market.
“The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules,” said NAR Chief Economist Lawrence Yun.