Pending Home Sales Up In November For Third Straight Month, Says NAR

31 Dec 2014 | Author: | No comments yet »

Pending Home Sales Monthly Rise Highest in 14 Months.

WASHINGTON (AP) — The number of Americans signing contracts to buy homes rose modestly in November as a strengthening economy helped nudge some would-be homebuyers. NAR’s Pending Home Sales Index, which tracks contract signings (as opposed to closed sales), rose 0.8% in November to 104.8, the trade group said Wednesday. (An index of 100 represents an “average” level of contract activity.) November’s pending sales beat the 0.5% consensus increase forecast by economists surveyed by Bloomberg ahead of the release, and were also 4.1% higher than in November 2013, when the index stood at 100.7.

That change marks the highest year-over-year gain since August 2013 (5.6%). “The consistent economic growth and steady hiring we’ve seen the second half of this year is giving buyers enough assurance to consider purchasing a home before year’s end,” said Lawrence Yun, NAR’s chief economist. “With rents now rising at a seven-year high, historically low rates and moderating price growth are likely to entice more buyers to enter the market in upcoming months.” November’s numbers continue a slight shift in the market that began in September. Until then, contract signings had been down on a year-over-year basis since September 2013, when rapidly rising prices appeared to slow the pace at which Americans were purchasing homes. After a two-year rebound, housing demand faltered in the middle of 2013 amid inventory shortages, rising prices and a sudden increase in mortgage rates. Yun indicated that falling gas prices will also help consumers save for a down payment and also boost sales, as will the opportunity to put down less money on a home. A NAR survey released last month showing that median down payments ranged from 6% for first-time homebuyers to 13% for repeat buyers. “There’s still misperception out there that a much higher down payment is needed, while that’s not the reality,” Yun says.

Pending sales reached their highest level in the South since July 2013, and the seasonally adjusted index for that region has been higher in only three other months since the housing bust began in 2007. Many potential buyers lack the savings and strong credit history needed to afford a home, causing them to rent or remain in their existing houses instead of upgrading. News Corp, owner of The Wall Street Journal, also owns Move Inc., which operates a website and mobile products for the National Association of Realtors.

The average rate on the 30-year fixed mortgage for the week ended Wednesday stood at 3.87%, near its lowest level of 2014, according to Freddie Mac . Those re-sales dropped more than forecast last month to a 4.93 million annual pace, the weakest reading since May and down 6.1 percent from a 5.25 million pace in October, NAR data showed last week.

The U.S. economy that has generated 2.65 million new jobs so far this year, and the unemployment rate has dropped to 5.8% from 6.7% at the start of 2014. Pending contracts for existing homes increased in November in the Northeast (up 1.4% above October), South (by 1.3%), and West (by 0.4%), but fell on a monthly basis in the Midwest (by 0.4%).

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