The National Association of Realtors this morning released October Pending Home Sales data
Pending Home Sales, Housing Starts, and Building Permits are considered more forward looking/timely than other housing indicators like Existing Home Sales.
NAR's headline says it all: Nine Consecutive Gains for Pending Home Sales
From the NAR press release...
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6.
The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.
Lawrence Yun, NAR chief economist, said home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said.
“This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.
Yun cautioned that home sales could dip in the months ahead. “The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months. Given the lag time, we could see a temporary decline in closed existing-home sales from December until early spring when we get another surge, but the weak job market remains a major concern and could slow the recovery process.
“Still, as inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families,” Yun said.
Regionally, Pending Home sales were:
- +19.9% in the Northeast, which is 44.2% above a year ago.
- +11.6% in the Midwest, 36.6% higher than October 2008.
- +5.4% in the South, which is 31.6% above a year ago.
- -11.6% in the West, 21.9% above October 2008 levels