This month we have some encouraging news from the pending home sales index that is published by the National Association of Realtors. According to the NAR:
"The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing."
Picture #1: Non-seasonally adjusted pending home sales increased in August for the first time in 35 months. The pending home sales index for August was 99.3, compared to 94.6 in August of 2007.
Picture #2: The index increased by 5% in August compared to August of 2007.
Picture #3: Although the index increased from August of 2007, it still remained well below the index levels for every other August dating back to 2001.
Adding it all up: This is a step in the right direction. Let's see if the August increase in the pending home sales index leads to a corresponding increase in September existing home sales. More on that later this month.