NAR predicts housing upturn in second half of 2008

The National Association of Realtors (NAR) said its index of pending home sales -- which measures signed purchase agreements in the United States -- fell 1.9 percent month-over-month, though recovery is possible in the second half of 2008.

Pending home sales in February fell 4.9 percent month-over-month to 84.6, following an upwardly revised figure of 86.2 in January. The Pending Home Sales Index is a forward-looking indicator based on contracts signed. The February figures still are 21.4 percent lower than the February 2007 index of 107.6.

“Existing-home sales could start to show a sustained increase within a few months, unless there are some additional economic problems or excessive inflationary pressure,” said Lawrence Yun, chief economist for the NAR. “We’re looking for essentially stable sales in the near term, before higher mortgage loan limits translate into more sales in high-cost markets. The wider access to affordable credit should increase sales activity notably this summer as pent-up demand begins to be met.”

Regionally, pending sales rose 3.2 percent in the Northeast and 2.1 percent in the West. The index fell 3.7 percent in the Midwest and 5.5 percent in the South.