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Pending home sales surged 5.2 per cent in October.This was much higher than the 1.0 per cent gain expected by economists.
“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,” wrote the NAR’s Lawrence Yun.
September’s number was revised up to 0.4 per cent from a previous reading of 0.3 per cent.
The U.S. housing recovery has been one of the most bullish economic stories in the world.
From the NAR:
Pending Home Sales Rise in October to Highest Level in Over Five Years
WASHINGTON (November 29, 2012) – Pending home sales rose strongly in October with mixed regional results, according to the National Association of Realtors®.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, increased 5.2 per cent to 104.8 in October from an upwardly revised 99.6 in September and is 13.2 per cent above October 2011 when it was 92.6. The data reflect contracts but not closings.
Lawrence Yun , NAR chief economist, said buyers are responding to favourable market conditions. “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.”
Outside of a few spikes during the tax credit period, pending home sales are at the highest level since March 2007 when the index also reached 104.8. On a year-over-year basis, pending home sales have risen for 18 consecutive months.
Yun noted there are clear regional patterns. “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,” he said.
“The Northeast saw some impact from Hurricane Sandy, but limited inventory in the West is keeping a lid on the market. All regions are up from a year ago, with double-digit gains in every region but the West,” Yun said.
The PHSI in the Northeast slipped 0.1 per cent to 79.2 in October but is 13.3 per cent above a year ago. In the Midwest the index jumped 15.6 per cent to 104.4 in October and is 20.0 per cent above October 2011. Pending home sales in the South rose 5.5 per cent to an index of 117.3 in October and are 17.4 per cent higher than a year ago. In the West the index declined 1.1 per cent in October to 105.7, but is 0.9 per cent above October 2011.