Pending home sales varied by region, reflecting the uneven nature of the housing market recovery. Learn more.
Pending home sales remained essentially flat for the month of September, but varied significantly by region, according to data released today by the National Association of Realtors which reflects unevenness in the housing market recovery.
The association’s Pending Home Sales Index, a forward-looking indicator, rose 0.3 percent from August to September. The index tracks housing contracts that are signed but not completed, a process that typically takes one to two months.
“Home contract activity remains at an elevated level in contrast with recent years, but currently appears to be bouncing around in a narrow range,” Lawrence Yun, the association’s chief economist said in a statement. “This means only minor movement is likely in near-term existing-home sales, but with positive underlying market fundamentals they should continue on an uptrend in 2013.”
September marks the 17th consecutive month of annual gains for pending home sales, leading to the strong recovery for existing home sales tracked by the association for 2012. Existing home sales are expected to be 9 percent higher this year compared to last, and are projected to rise another 9 percent in 2013 to 5.1 million.
The national median existing home price is expected to rise by 6 percent in 2012 and 5 percent next year, according to the association. The data contributes to a growing consensus that the housing market is on the road to recovery with some regions of the country faring better than others.
Pending home sales rose 1.4 percent in September in the Northeast region for a year-over-year gain of 26.1 percent, while the Midwest posted a 5.8 percent drop in pending home sales for September for an annual increase of 19.3 percent. Contract activity in the West is constrained by tight inventory and increased by 4.3 percent in the 12 months ending in September, making the West the only region to post single-digit increase in contract activity compared to a year ago.
New home sales released by the Commerce Department yesterday also revealed regional differences in the housing market. In the third quarter of 2012, new home sales rose by 18.5 percent in Northeast, fell 8.2 percent in the Midwest, and rose by 4.9 percent in the South and 4 percent in the West.
Housing remains relatively affordable, though mortgage rates have inched up in the last week, according to data released today by Freddie Mac. Rates for a 30-year fixed-rate mortgage averaged 3.41 percent in the week ending today, up from the record low of 3.36 for the week ending October 4.
New data on price movements for the housing market are due next Tuesday with the release of the latest Case-Shiller home price index.