Pending Home Sales Rise Two Months in a Row

October 04, 2010

The amount of home buyers who signed contracts in August to purchase homes increased for the second straight month, signaling a rebound in the housing industry.

The good news comes from the National Association of Realtors (NAR) via the Pending Home Sales Index, which can measure future sales activity because there is usually one to two months between the time when a contact is signed and when the deal is closed.

Contract pending on a houseAccording to the NAR, the Index rose 4.3 percent to 82.3 in August from July. It was a better-than-expected increase since economists had predicted it would rise to 81.4.

It is the second consecutive month of positive news for the index, which saw a 4.5 percent increase the month prior.

“Attractive affordability conditions from very low mortgage interest rates appear to be bringing buyers back to the market,” said Lawrence Yun, NAR chief economist. “However, the pace of a home sales recovery still depends more on job creation and an accompanying rise in consumer confidence.”

An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined and the first of five consecutive record years for existing-home sales.

The next Pending Home Sales Index will be released November 5. Let’s hope for three positive months in a row as we inch back to 100 and beyond. Stay tuned to Chicagoland Real Estate Forum for the results.

Categories: Economy

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