Home buyers continue to push the U.S. housing market forward with first time home buyers contributing nearly 40% of all purchases here in the Springfield, Missouri market.
In November, for the second straight month, the Pending Home Sales Index eclipsed its benchmark reading of 100, posting a value of 106.4.
The Pending Home Sales Index (PHSI) is published monthly by the National Association of REALTORS® and is pulled from the local MLS systems such as The Springfield Greater Board of Realtors (GSBOR). It tracks homes under contract to sell, but not sold. The PHSI is relative index, comparing current contract activity to the activity of 2001 — the first year for which “pending homes” were tallied for an index.
The Pending Home Sales Index has posted an average score of 100.2 from January 2012 through November 2012, the most recent month for which there is data. This is a significant data point because it means that the 2012 housing market is performing better than the 2001 housing market; one which is widely considered a strong one for housing.
It’s also meaningful because it foreshadows a strong market for 2013. With an increasing number of homes under contract to sell, it can be assumed that “closed units” will increase in the future, too.
The National Association of REALTORS® says that 80% of U.S. homes under contract go to closing within 60 days, and that many of the remaining homes go to closing within days 61-120. Here at PrimeLending in Springfield, Team Semple pride ourselves on having doc’s to title 48 hours prior to the contract/closing date and with closing 87% within 30 days of application date.
The Pending Home Sales Index is a forward-looking indicator.
The monthly Pending Home Sales Index, therefore, can foreshadow today’s SWMO buyers and sellers in cities like Springfield, Ozark and Nixa with what’s ahead for the housing market.
Based on November Pending Home Sales Index, we should expect to see the home restate market to remain strong, and to pick up strength, through the first quarter of 2013. Demand for homes is high, mortgage rates are still stupid low, and buyers are looking to get a good deal.
The first few months of the year are often thought to be “slow” for the housing market. This year, however, that may not be the situation. If you’re actively looking for homes in rural areas within Missouri such as Strafford, Willard or Republic, the best home prices may be the ones you get this winter.