According to the latest report from the National Association of Realtors Pending Homes Sales Index, pending home sales are at the highest level in 19 months.
What has precipitated this rise? Lawrence Yun, NAR chief economist, said the gains may result partially from delayed transactions. "Housing affordability conditions are at a record high and there is a pent-up demand from buyers who’ve been on the sidelines, but contract failures have been running unusually high. Some of the increase in pending home sales appears to be from buyers recommitting after an initial contract ran into problems, often with the mortgage," he said.
There was a 7.3 percent jump in contract signings in November, up 5.9 percent from the year prior. The last time to market had this many signings was in April 2010 when the deadline for the first time home buyer tax credit was
"November is doing reasonably well in comparison with the past year. The sustained rise in contract activity suggests that closed existing-home sales, which are the important final economic impact figures, should continue to improve in the months ahead," Yun added.
Regionally, the largest rise was seen in the West, which has previously struggled. It rose 14.9 percent for the Month, giving it a boost of 2.9 percent of November 2010.
The Northeast was close to double-digit gains with a solid 8.1 percent rise. It is still 0.3 percent below last year’s figures. The Midwest is doing well. It is 9.5 percent above November 2010 for
pending sales and rose 3.3 percent for the month.
Finally, the South rose 4.3 percent, rising 8.7 percent above last year’s numbers.
Other factors that could have contributed to this rise are recent declines in the unemployment rate. The rate has lingered about 9.0 percent for months, but fell below this mark in recent weeks. Holiday hirings were up, but so were hirings in other sectors.
Consumer confidence peaked 10 points in November to the highest rate seen since the end of the recession and retailers boasted the best holiday sales figures in years. This could signal a return of buyers to the housing market.
Carla Hill Realty Times January 4, 2011 http://realtytimes.com/rtpages/20120104_sales.htm
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