Pending Home Sales Climb Most in Midwest
WASHINGTON -- Pending home sales rose strongly in October but some regions fared better than others, the National Association of Realtors’ index shows. The rise was highest in the Midwest where the Realtors' Pending Home Sales Index jumped 15.6% to 104.4 in October, 20% above October 2011.
The overall index, a forward-looking indicator based on contract signings, rose 5.2% to 104.8 in October from an upwardly revised 99.6 in September and is 13.2% above October 2011 when it sttod at 92.6. The data reflect contracts but not closings.
A sale is classified as pending when a contract has been signed but the transaction has not closed, though the sale usually is completed within a or two months of signing.
Lawrence Yun, NAR chief economist, said buyers are responding to favorable 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," he noted.
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 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."
In the Northeast, the index slipped 0.1% to 79.2 in October but is 13.3% above a year ago. In the Midwest the index jumped 15.6% to 104.4 and is 20% above October 2011. Pending sales in the South rose 5.5% to a reading on the index of 117.3 and are 17.4% higher than a year ago. In the West the index declined 1.1% to 105.7, but is 0.9% above October 2011.
Published by The Business Journal, Youngstown, Ohio.
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