What is the Pending Home Sales Index (PHSI), and what does it mean? Looking at historical home-sales statistics gives us some market trending perspective, but a forward-looking indicator, like the PHSI, gives us a good way to gauge what's ahead in the real estate market. Also known as a "leading" indicator, we can often spot emerging trends with this index.
In the Western Region (which is as local as NAR gets with their index), the numbers actually stack up a little differently. Looking at the data, it looks like the index peaked last Fall when the previous federal tax credit for 1st-time home buyers was set to expire. Since then, the regional index has flattened out a bit - although we were up 8.8% in March, year over year. Not bad, but nowhere near the national increase of about 21%. The region where the recent PHSI has jumped pretty dramatically was in the South, where March 2010 reflected 121.2, the highest index for that region since 2007.
Using NAR's seasonally-adjusted figures for the Wester Region, it looks as though the federal tax credit played a declining roll in the PHSI as we moved from the end of 2009 through March of this year.
Now that the federal tax credit opportunity expired on April 30th, what does this data mean for our regional and local real estate markets? On a regional level, we're likely to be less affected by the expiration, as the PHSI numbers hav leveled off from the peak. Home mortgage rates are still at attractive levels, but have ticked up slightly. Rising interest rates continue to be a much more important factor thatn the temporary federal tax credit, making the timing of your decision about buying a Roseville home an important one.
If you're interested in the NorCal real estate market and would like more information about a particular property or Sacramento neighborhood, feel free to contact us at 916-774-3151.