WASHINGTON (AP) —
An index measuring the number of Americans who signed contracts to buy
homes in October jumped to nearly its highest level in almost six years.
Steady job gains and record-low mortgage rates have made home buying more attractive.
The National Association of Realtors
said Thursday that its seasonally adjusted pending home sales index
rose 5.2 percent to 104.8 in October. Excluding a few months when the
index spiked because of a homebuyer tax credit, that is the highest level since March 2007.
The increase points to healthy
sales increases of previously occupied homes in the months ahead.
There's generally a one- to two-month lag between a signed contract and a
completed sale.
The rise in sales adds to
evidence of a steady housing recovery. Builders are more confident in
sales and are starting construction on more homes. Home prices are
rising on a consistent basis, which encourages more potential buyers to
come off the sidelines and purchase homes. And more people may put their
homes on the market if they gain confidence that they can sell at a
good price.
The report is "another indicator suggesting that the recovery in housing has broadened and has sustained momentum," Michael Gapen, an economist at Barclays Capital, said in a note to clients.
Signed contracts jumped 15.6
percent in the Midwest and rose 5.5 percent in the South. But they fell
1.1 percent in the West and dipped 0.1 percent in the Northeast.
Superstorm Sandy lowered pending
sales in the Northeast, the Realtors' group said. The West was hurt by
low inventories of available homes.
Mortgage rates remained near
record lows this week. The average rate on the 30-year loan was 3.32
percent, mortgage buyer Freddie Mac said, just above 3.31 percent last
week, which was the lowest on records dating to 1971.
A big reason for the rebound in
housing is that the excess supply of homes that built up before the
housing crisis has finally thinned out. The number of previously
occupied homes available for sale has fallen to a 10-year low. The
inventory of new homes is also near the lowest level since 1963.
At the same time, more people are looking to buy or rent a home after
living with relatives or friends during and immediately after the Great
Recession.
Those trends are also pushing up
home sales and construction. Sales of previously occupied homes are near
five-year highs, excluding temporary spikes in 2009 and 2010 when a
homebuyer tax credit boosted purchases.
Builders, meanwhile, are more
optimistic that the recovery will endure. A measure of their confidence
rose to the highest level in six and a half years this month. And
builders broke ground on new homes and apartments at the fastest pace in
more than four years last month.
US pending home sales jump to nearly a 6-year high
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US pending home sales jump to nearly a 6-year high
