28 April 2011 18:54 [Source: ICIS news]
That 94.1 measure restores the index to nearly the level last seen in November 2010 when it was at 94.5. In the intervening months, the index has dipped and come back up again.
NAR chief economist Lawrence Yun said the pending home sales index has shown “uneven but notable improvement”.
“Since reaching a cyclical bottom last June, pending home sales have posted an overall gain of 24% and demonstrate the market is recovering on its own,” Yun said.
The improvement in the pending sales index, he said, “means modest near-term gains in existing home sales are likely”.
He said that he expects existing home sales for full-year 2011 should show an advance of 5-10%.
A residential property sale is listed as “pending” when a contract has been signed but the transaction has not been closed and funded with a mortgage loan. A pending sale usually closes within a month or two of contract signing.
The NAR pending home sales index is seen as a reliable forward-looking indicator for near-term expectations in the crucial
The housing industry is a key downstream consumer for the sector, especially the construction of new homes, which drives demand for a wide range of chemicals, resins and derivative products.
While sales of existing homes do not generate a parallel demand for chemicals, those sales do take homes off the market, reducing the inventory of unsold properties. That, in turn, helps build demand for new residential construction.
Despite the March gain for pending sales, other housing data suggest that the home-building sector is still in jeopardy, with some analysts warning that the sector could be on the verge of a double-dip recession.
A recent survey of home builders showed they have little or no expectation of near-term improvement in sales, and a construction industry outlook suggested that a housing recovery may take up to four years or longer.
Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
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