Lawrence Yun, NAR senior economist, said it is encouraging that the increase occurred in all four major regions. "However, it is too early to say if home sales have already passed bottom," he said. "Still, major declines in home sales are likely to have occurred already and further declines, if any, are likely to be modest given the accumulating pent-up demand."
The 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.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
Annual changes in the index are more closely related to actual market performance than are month-to-month comparisons. As the relatively new index matures and seasonal adjustment factors are refined, the month-to-month comparisons will become more meaningful.
The PHSI in the West increased 8.6 percent in June to 103.6 but was 5.5 percent below a year ago. In the Northeast, the index rose 3.1 percent from May to 96.0 but is 2.4 percent lower than June 2006. The index in the South increased 4.7 percent in June to 111.6 but was 12.7 percent below a year ago. In the Midwest, the index rose 3.5 percent in June to 92.5 but was 8.2 percent lower than June 2006.
