NAR Creates New Indicator For Housing Market;Points To Strong Sales Activity In Early 2005

The National Association of REALTORS® has developed the Pending Homes Sales Index, (PHSI) a predictive sales index that it claims will "offer more solid information on changes in the direction of the market than any of the indicators currently available."

Pending Home Sales Index: NAR economists are using a large national sample based upon 20 percent of home sales.

"David Lereah, NAR's chief economist, said the level of contract activity in January indicates a sense of the direction for existing-home sales in February and March. 'The Pending Home Sales Index tells us that home sales activity in the near term is expected to be historically high, but is trending off of peak levels recorded in 2004,' he said. Data on February existing-home sales will be released March 23."

The PHSI can be used to chart homes sales statistics both as a stand-alone model and in conjunction with the Existing Home Sales and New Home Sales indeces.