For the eighth month in a row, pending home sales are on the rise — that’s a new record:
Realtor: The Pending Home Sales Index, a forward-looking indicator based on contracts signed in September, rose 6.1 per cent to 110.1 from a reading of 103.8 in August, and is 21.2 per cent higher than September 2008 when it stood at 90.9. The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8.
Thank the government for the boost. First-time buyer tax credits and FHA loans are fueling these numbers. But the intervention will go away, and there are already dark clouds:
Yun added that strong near-term reports should not be overstated. “We’re clearly not out of the woods because an excess of homes remains on the market despite recent improvements,” he said. “Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this incoming inventory.”