Pending Home Sales Point To Seller's Market This Summer

The National Association of REALTORS® Pending Home Sales Index rose for the third straight month last month.

A "pending home sale" is a home under contract to sell, but not yet closed.

The Pending Home Sales Index rose 5 percent in March, posting its second-highest reading since April 2010. Not coincidentally, that month marked the expiration of last year's federal home buyer tax credit.

Home buyers and sellers in Marietta would do well to watch the Pending Home Sales Index each month. This is because -- unlike most government and private data -- the Pending Home Sales Index is a "forward-looking" indicator.

Because 80% of "pending" homes close within 2 months, and a significant share of the rest close within months 3 and 4, the Pending Home Sales Index tends to correlate to future strength (or weakness) in housing.

The Pending Home Sales Index, in other words, is an excellent precursor to the Existing Home Sales report, issued monthly.

By region, the Pending Home Sales Index varied last month.

• Northeast : -3.2% from February
• Southeast : +10.3% from February
• Midwest : +3.0% from February
• West : +3.1% from February

All 4 regions were worse from a year ago.

As with everything in housing, however, we must remember that real estate is neither national, nor regional. It's local. Sales volume may be higher in areas like the Midwest, but that doesn't mean that all Midwest markets are experiencing similar gains, if any gains at all.

To get local real estate data for BrookStone, for example , talk to a real estate agent that specializes in that area. It's the best way to know what's happening on the street level.

A Simple Explanation Of The Federal Reserve Statement (April 27, 2011 Edition)

Earlier today, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.

The vote was 10-0 -- the third straight meeting after which the FOMC vote was unanimous.

In its press release, the FOMC noted that since its March 2011 meeting, the economic recovery is proceeding "at a moderate pace" and that labor markets conditions are "improving gradually". Household spending and business investment "continue[s] to expand" but the housing sector remains "depressed".

Furthermore, the FOMC's statement discussed the Federal Reserve's dual mandate of (1) Managing inflation levels, and (2) Fostering maximum employment. The statement acknowledged recent inflation pressures on the economy, but it expects those pressures -- because they're related to oil and food prices -- to be "transitory". Unemployment remains "elevated".

The FOMC statement also re-affirms the group's plan to keep the Fed Funds Rate near zero percent "for an extended period" of time, and to keep its $600 billion bond market support package -- more commonly called "QE2" -- intact.

The statement's verbiage suggests that a third support package may be created after QE2 ends in June 2011, depending on the needs of the economy.

Mortgage market reaction to the FOMC statement has been positive thus far. Mortgage rates in Marietta are unchanged, but leaning lower. And, as always, market sentiment could shift quickly. If you like today's mortgage rates, consider locking in.

The FOMC's next scheduled meeting is a 2-day event, June 20-21 2011.

New Home Supply Falls To 16-Year Low

After posting an all-time low in February, New Home Sales rebounded strongly last month.

Based on joint research from the Census Bureau and HUD, 300,000 new, single-family homes were sold on a seasonally-adjusted, annualized basis in March. It's an 11 percent improvement from February, and right in-line with the 6-month average.

The supply of available new homes improved, too, in March, falling by close to a full month.

At the current pace of sales, the entire new home housing stock would be sold in 7.3 months. This is the second-best reading in a year, a statistic partially-supported by the relatively small number of new homes on the market.

There are now just 183,000 new homes available for sale across Marietta and the country. That's the smallest reading since the Census Bureau started to keep New Home Sales records beginning in 1995.

However, it should be noted that the March New Home Sales data is suspect. The reading's margin of error exceeds it actual measurement by almost double. It's possible that sales volume fell in March instead of rising, therefore. The Census Bureau says as much in its footnotes:

The change [in new home sales] is not statistically significant; that is, it is uncertain whether there was an increase or decrease [in March 2011].

We won't know for certain until future data revisions are made.

If you're a home buyer in BrookStone , though, and want to stay ahead of the market, you won't want to take chances. If the Census Bureau finds its data to be accurate after revisions are made, new home prices will already have started to rise.

You may get your best home value by buying sooner rather than later.