Gloomy housing stats, but hope for future

The number of Americans who signed a contract to buy a new home dropped in February — yet another sign that the real estate market is still reeling. The National Association of Realtors' index of signed purchase agreements fell 1.9% to a reading of 84.6, from an upwardly revised reading of 86.2 in January. This was 21.4% lower than the reading of 107.6 in February 2007. A reading of 100 is equivalent to the average level of sales activity in 2001, when the index was started. "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 Laurence Yun, the NAR’s chief economist, according to a statement. "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 Chicago-based NAR said the pending-home-sales index fell in the South, Midwest and West by 5.5%, 3.7% and 9.8%, respectively. Pending home sales in the Northeast increased 3.2%. Existing-home sales will likely increase from an annual pace of 4.9 million in the first quarter to 5.9 million in the fourth quarter, according to NAR. The aggregate existing-home price will probably ease by 1.4% to a median of $215,800 for 2008 before rising 3.7% to $223,800 in 2009, according to the group.