Pending home sales have risen for nine months in a row, a first for the series of the index since its inception in 2001, according to the NATIONAL ASSOCIATION OF REALTORS®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.
Lawrence Yun, NAR chief economist, said home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said. “This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.”
*Pending sales in the Northeast surged 19.9 percent to 100.2 in October and is 44.2 percent above a year ago.
*In the Midwest, the index rose 11.6 percent to 109.6 and is 36.6 percent higher than October 2008.
*Sales in the South increased 5.4 percent to an index of 115.4, which is 31.6 percent above a year ago.
*In the West, the index fell 11.2 percent to 127.7 but is 21.9 percent above October 2008.