PENDING HOME SALES INDEX HITS LOWEST LEVEL IN FOUR YEARS

Activity in the housing market will remain slow during second quarter as consumers continue to react to tighter lending standards and a decline in subprime lending, according to a recent report from NAR. The Association's Pending Home Sales Index (PHSI), a forward-looking indicator that gauges home sales activity for upcoming months, continued to decline in March, falling 10.5 percent from a year ago to a reading of 104.3. While a PHSI of 100 or more generally indicates a high level of home sales activity, the March PHSI was the lowest reading since March 2003. Despite the decline, NAR economists expect home sales to pick up during the second half of the year.

The PHSI declined across the nation in March compared with the readings a year ago. On a regional basis, the PHSI was highest in the South, where it declined 10.6 percent to 115.2. In the West, the index fell 8.6 percent to 104. The PHSI also declined in the Midwest and Northeast regions, decreasing to 95.9 and 94.2, respectively.

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