Home sales contracts soar in October
National Association of Realtors index spikes 32
In October the National Association of Realtors recorded an unprecedented
ninth consecutive month of increases in the number of signed contracts, a
good indicator of where the housing market is headed.
NAR's Pending Home Sales Index (PHSI) is 31.8% higher than a year ago.
That's the biggest year-over-year gain in the history of the index. The PHSI
is also at its highest level since March 2006.
NAR's chief economist, Lawrence Yun, gives much of the credit for increased
sales to the tax credit for first-time [U.S.] homebuyers. "The tax credit is
helping unleash a pent-up demand from a large pool of financially qualified
renters" Yun said.
In a related story, the Census Bureau reported that private residential
construction spending surged 3.9% during October.
Yun cautioned, however, that housing market indicators, such as pending
sales, may weaken over the next few months. “We could see a temporary
decline in closed existing home sales from December until early spring when
we get another surge," he added
The good news is that number of homes on the market has declined, removing
some of the bloat that has depressed prices. Yun predicted that
housing
conditions could return to near normal and home prices firm up by mid-2010
Posted: 1 December 2009
Source: CNN Money
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