The Associated Press reports that Pending Home Sales Hit Low in February:
WASHINGTON (AP) – An industry group said Tuesday that pending U.S. home sales fell in February to the lowest reading since the index began, signaling the housing market distress is not yet over.
The National Association of Realtors’ seasonally adjusted index of pending sales for existing homes fell to 84.6 from January’s upwardly revised reading of 86.2. The index stood at 107.6 in February 2007.
Wall Street economists surveyed by Thomson/IFR had predicted the index would inch up to a reading of 86.3.
A reading of 100 is equal to the average level of sales activity in when the index started. The previous low was August’s reading of 85.8, recorded at the height of the credit crunch.
(emphasis added)
Wow, the lowest reading ever, since the index began!! But when did the index begin? It turns out it began just a few years ago, in 2001. The National Association of Realtors website explains that the index was started in the banner year of 2001 and uses that year as a baseline:
An index of 100 is equal to the average level of contract activity during 2001, the first year to be analyzed. Coincidentally, 2001 was the first of four consecutive record years for existing-home sales. 2001 sales are fairly close to the higher level of home sales expected in the coming decade relative to the norms experienced in the mid-1990s. As such, an index of 100 coincides with a historically high level of home sales activity.
I don’t have much to say about the housing market; I’m happy to leave that mostly to David B., our resident real estate blogger. But it seems like this might be worth noting in the article to give a more complete picture of things.