Pending home sales are up sharply in October, though real estate market trends vary be region. Learn more.
Pending home sales – a predictor of signed housing contracts – rose 5.2 percent in October, according to the latest real estate market trends reported today by the National Association of Realtors.
The association’s Pending Home Sales Index has realized 18 consecutive months of annual gains, reaching a reading of 104.8 in October, the highest level since March 2007, excluding a few spikes stimulated by the first-time home buyers’ tax credit, said the Chicago-based trade association.
“We’ve had very good housing affordability conditions for quite some time, but we’re seeing more impact now from steady job creation, and rising consumer confidence about home buying now that home prices have clearly turned positive,” Lawrence Yun, the association’s chief economist, said in a statement.
Home prices rose more than 11 percent in October 2012, compared to October 2011, according to the association. The gains have raised total home equity by $760 billion since the beginning of the year, according to Yun, a figure that could reach $1 trillion by year end.
The Pending Home Sales Index tracks home purchase contracts that have been signed, but not completed. A sale is typically finalized within 60 months of signing. The index reveals regional real estate market trends, according to Yun. “Contract activity surged in the Midwest and is showing very healthy gains in the South, but was down slightly in both the Northeast and West.”
In other real estate market trends, the Commerce Department yesterday reported a 0.3 percent dip in sales of new single family homes for October of 2012. Despite the drop, the seasonally adjusted annual rate of 368,000 home sales for October is 17.2 percent higher than the 314,000 rate for October 2011. Inventories stand at 147,000, a 4.8-month supply at the current sales rate.
“The latest numbers are right in line with our forecast, which projects that sales will resume a slow, upward trajectory going forward and will end 2012 about 20 percent ahead of 2011,” said David Crowe, chief economist for the National Association of Home Builders, a Washington, DC, trade association that tracks real estate market trends.