The National Association of Realtors released the Pending Home Sales Index today.  The index measures housing contract activity and is based on signed real estate contracts for existing single-family homes, condos and co-ops. A signed contract is not counted as a sale until the transaction closes, which is usually one to two months out for most contracts.

The index declined 7.6% from December to 90.4 in January.  Since last January, however, the index is up 12.3%.  The National Association of Realtors blamed the low sales on cold and poor weather conditions which detracted buyers from house shopping.  The cold weather doesn’t quite explain the lower numbers though as the numbers are seasonally adjusted.

An index of 100 is equal to the average level of contract activity during 2001, the first year the index was created. 2001 was also the first of four consecutive record years for existing-home sales. With 2001 as the base year an index of 100 coincides with a historically high level of home sales activity.  It may not be reasonable for the people to expect a level of 100 for this index in the future - at least until the base year reflects a normal market.