Two reports released Monday, April 5, showed a continued thawing in the economy. Pending home sales surged 8.2% in February, according to the National Association of Realtors (NAR), offering some positive news on the staggering housing market. Second, a report on the services sector showed it grew in March at its fastest pace in nearly four years.
Lawrence Yun, NAR chief economist, said the housing report “may signal the early stages of a second surge of home sales this spring,” and likely reflected the effects of the tax credit to buy homes.
February’s index of pending home sales jumped to 97.6 from 90.2 in January, and was 17.3% above February 2009, when the index stood was 83.2. The index, a leading indicator of sales trends, reflects contracts and not closings, which usually occur with a lag time of one or two months.
The report helped ease concerns on the disappointing report on existing home sales for February that was released in March. That report showed a 0.6% drop in sales and a big rise in inventory.
The housing index in the Northeast rose 9% in February, and is 18.9% higher than February 2009. In the Midwest the index jumped 21.8%, and is 18.7% above a year ago. Pending home sales in the South increased 9.2%, and the index is 17.5% higher than February 2009. In the West the index fell 4.8%, but is 14.6% above a year ago.
The report on the services sector by the Institute for Supply Management (ISM) showed a third consecutive month of growth, rising to 55.4, its strongest reading since May 2006, and up from February’s 53.0 reading. A reading above 50 indicates expansion in the sector.
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