What is the PHSI?

Each month I study the Pending Home Sales Index, issued by the National Association of Realtors. The index is based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed.
The NAR uses a large national sampling to come up with their report. It ties the level of monthly contract activity to the level of sales that will occur in the following two months. An index of 100 is equal to the average level of contract activity during 2001 (the first year to be examined as well as the first of five consecutive record years for existing-home sales), and it coincides with a level that is considered historically healthy.
The most recent index report for March looked positive: It rose 5.1% to 94.1, up from 89.5% in February. The index is below the 106.2 in March 2010. It's important to note that March & April 2010 activity was at an elevated level in order to meet contract deadlines for the home buyer tax credit.