Pending Home Sales Hit Highest Level Since April 2010

Pending Home Sales Hit Highest Level Since April 2010Pending home sales, a market indicator based on contract signings, rose in November for the third straight month, hitting its highest level in two-and-a-half years, according to the National Association of Realtors.
The Pending Home Sales Index jumped 1.7 percent to 106.4 in November,  from a downwardly revised 104.6 in October. It is 9.8 percent above November 2011 when it was 96.9. The data reflect contracts but not closings.
The index is at its highest mark since April 2010, when it reached 111.3. That’s when buyers were rushing to beat the deadline for the home buyer tax credit.
“With the exception of several months affected by tax stimulus, the last time there was a higher reading was in February 2007 when the index reached 107.9,” the NAR said.
Lawrence Yun , NAR chief economist, said home sales are on a sustained uptrend, confirming other housing market data over recent weeks that point to a solid recovery.
“Even with market frictions related to the mortgage process, home contract activity continues to improve,” Yun said. “Home sales are recovering now based solely on fundamental demand and favorable affordability conditions.”
On a year-over-year basis, pending home sales have risen for 19 consecutive months.
The NAR projects that existing-home sales will rise 8 to 9 percent in 2013 to about 5.1 million, following a 10 percent gain expected for all of 2012.
The median existing-home price is projected to rise just over 4 percent in 2013, after rising more than 7 percent in 2012.
The index is based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed. However, the sale usually is finalized within one or two months of signing.

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