For the second consecutive month, the number of homes under contract to sell increased — further evidence that housing markets may have already bottomed. As reported by an industry trade association, the Pending Home Sales Index rose by 3-plus percent last month. A “pending” home is one that’s under contract but has yet to close.  This is one reason why the Pending Home Sales Index is an imperfect statistic. Just because a home is under contract doesn’t mean it will actually sell.  A lot can go wrong between the date of agreement and the date of closing.  Deals fall apart all the time.  But, when the number of pending contracts rises, we can infer that buy-side demand for homes is strong. It’s likely that the number of homes under contract is being influenced by a combination of low mortgage rates, relatively inexpensive homes, and various tax credits for certain homebuyers.  Overall, it’s spurring demand and that’s part of what’s captured by the Pending […]

The Case-Shiller Index is a popular reporting tool for the nation’s home prices.  Each month, researchers measure home values in 20 large cities, compile their findings, and then publish them to the public. The Case-Shiller Index is not a perfect measurement by any means.  It gives more weight to expensive homes than inexpensive ones, for example, and its sample set includes just 37 states.  But that doesn’t diminish its importance to the housing sector.  Because the Case-Shiller Index comes from the private sector, it’s an excellent counter for the U.S. government’s home value reporting tool — the House Price Index. In this current market, the Case-Shiller Index tends to report housing in a more negative light than does the government.  This doesn’t make either method more accurate, it just provides a helpful point/counter-point.  And that’s why February’s Case-Shiller Index is so important.  Despite reporting falling values in each of its 20 tracked cities, the Case-Shiller Index showed values falling with a lesser speed […]