U.S. pending home sales jumped 1.7 per cent month-over-month in November.Economist were expecting a 1.0 per cent month-over-month gain.
“Even with market frictions related to the mortgage process, home contract activity continues to improve,” wrote Lawrence Yun of the National Association of Realtors. “Home sales are recovering now based solely on fundamental demand and favourable affordability conditions.”
Here’s more from the NAR:
WASHINGTON (December 28, 2012) – Pending home sales increased in November for the third straight month and reached the highest level in two-and-a-half years, according to the National Association of Realtors®.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 1.7 per cent to 106.4 in November from a downwardly revised 104.6 in October and is 9.8 per cent above November 2011 when it was 96.9. The data reflect contracts but not closings.
The index is at the highest level since April 2010 when it hit 111.3 as buyers were rushing to beat the deadline for the home buyer tax credit. With the exception of several months affected by tax stimulus, the last time there was a higher reading was in February 2007 when the index reached 107.9.
Lawrence Yun , NAR chief economist, said home sales are on a sustained uptrend. “Even with market frictions related to the mortgage process, home contract activity continues to improve. Home sales are recovering now based solely on fundamental demand and favourable affordability conditions.”
On a year-over-year basis, pending home sales have risen for 19 consecutive months.
The upward momentum means existing-home sales should rise 8 to 9 per cent in 2013 to approximately 5.1 million, following a 10 per cent gain expected for all of 2012. The median existing-home price is projected to rise just over 4 per cent in 2013, after rising more than 7 per cent in 2012.
The PHSI in the Northeast rose 5.2 per cent to 83.3 in November and is 15.2 per cent above a year ago. In the Midwest the index edged up 0.1 per cent to 103.8 in November and is 15.2 per cent above November 2011. Pending home sales in the South were unchanged at an index of 117.2 in November and are 13.9 per cent higher than a year ago. In the West the index rose 4.2 per cent in November to 110.1, but is 3.2 per cent below November 2011 with inventory constraints limiting sales.