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Groundhog Day for Housing
2/2/2010
Six more weeks of winter? Today Punxsutawney Phil, a famous groundhog, saw his shadow, meaning that we are in store for another six weeks of winter. We aren’t expected to see an early spring in terms of existing housing sales either, based on data released today.
The pending home sales index was developed by the National Association of Realtors as a leading indicator for housing activity focusing on existing home sales. A pending sale means that a contract has been signed but the closing has not yet taken place. Last month’s report showed the index for November in the U.S. showed a 16.4 percent decrease to 95.6, and today’s new data showed that the December index was up 1.0 percent to 96.6. Since the second wave of home buyer tax credits are available through April, it is expected that the winter will remain slow in terms of pending housing sales but there will be a rush of activity before the credits expire.
So it looks like Punxsutawney Phil and the pending home sales index are indicating the same thing – that we still have to wait to see signs of spring.
- Alissa DeJonge, Assistant Director of Research, CERC
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