Existing Homes Sales Decrease in Some Regions, Increase in Others

By Kyle Chezum Updated on 3/4/2011

Standard & Poors reported a decrease in pending home sales for the month of February, hinting that total home sales for the month may be down from year end levels.  Pending sales data is easier to obtain than actual sales data, which is often held up for one or more months while transactions process.  But pending sales and existing sales naturally trend together.  It’s likely that fewer homes were sold in February than in January, just as fewer homes were sold in January than in December.

Also mentioned in S&P’s most recent report was data that indicated average home prices have fallen 30% in the past five years.  This is the largest, deepest decrease seen since the Great Depression.  Nationally, pending home sales decreased 2.8% in January after a 3.2% dip in December.  But the national average doesn’t account for regional differences, which are significant.

In the Midwest, for example, pending home sales dropped by a staggering 7.3% between the month of January and the month of December, making major waves in the financial marketplace.  But this effect didn’t occur everywhere.  In the South, pending home sales actually rose by 1.4% during the same period.  This shows the significance of regional economic factors on home sales and prices.

Other reports show that refinancing activity has increased in some sectors and that job growth is on the rise.  These indicators are signs that the economy is gaining health, but the housing sector may face a much longer road to recovery.