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NAR Says We Cooled It: Pending Home Sales Index Dropped

The NAR released its [Pending Home Sale Index [NAR]](http://www.realtor.org/publicaffairsweb.nsf/Pages/OctPHS2005?OpenDocument) which showed that the real estate market was easing. “The National Association of Realtors said its index of pending home sales, based on contracts signed in October, declined 3.2% from September to a seasonally adjusted 123.8. The reading was down 3.3% from a year earlier. The index was 100 in 2001.”

Positive economic news seemed to offset the weak housing news. Productivity fell, suggesting the inflation pressure is weakening. The post [NAR stuck on spin cycle [Property Grunt]](http://propertygrunt.blogspot.com/2005/12/nar-stuck-on-spin-cycle.html) makes a strong case that the NAR phrasing of a soft landing does not correlate to the data that they released. Its shows how much spin we are subject to.

[NAR Pending Sale Index [pdf]](http://www.realtor.org/Research.nsf/files/PHS0510.pdf/$FILE/PHS0510.pdf)

Note: “The Pending Home Sales Index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 closely parallels the level of closed existing-home sales in the following two months.”