Pending home sales drop at end of 2011, still better than end of 2010

The latest edition of the Pending Home Sales Index indicates that sales declined in December 2011 but were still significantly higher than the previous year, according to the National Association of Realtors.

The PHSI, which is based on data on contract signings, dropped 3.5 percent at the end of 2011, hitting 96.6. While down from November’s 100.1—a 19-month high for the index— the December 2011 figure is five percent higher than in December 2010. Despite the dip, economists are optimistic the positive trend will resume. They point out that with home prices so low, buyers are remaining persistent in their efforts.

Regionally, the West saw the greatest change in pending home sales, with totals dropping 11 percent in 2011; as with the overall figure, though, numbers are still up compared to December 2010. The Midwest experienced the largest month-to-month increase, rising 4 percent from November to December 2011; the year-to-year numbers are more than 13 percent higher than in 2010.

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