More Homebuyers Signed Contracts Last Month

January 28, 2011

Pending home sales continue to increase as December marked the fifth gain over the past six months.

The National Association of Realtors released its Pending Home Sales Index to show a rise of 2 percent to 93.7 based on contracts signed by homebuyers last month.

a real estate purchase contract and a penIt’s an increase from 91.9 in November, though it’s still 4.2 percent below the 97.8 mark in December 2009.

An index of 100 marks a healthy level of contract activity.

Here’s the breakdown by region of December’s Pending Home Sales Index:

*Midwest: Increased 8 percent to 84.6

*South: Jumped 11.5 percent to 101.9

*Northeast: Rose 1.8 percent to 73.9

*West: Fell 13.2 percent to 105.8

“Modest gains in the labor market and the improving economy are creating a more favorable backdrop for buyers, allowing them to take advantage of excellent housing affordability conditions,” said Lawrence Yun, NAR chief economist. “Mortgage rates should rise only modestly in the months ahead, so we’ll continue to see a favorable environment for buyers with good credit.”

Yun predicts that 2011 will continue to see an uptrend and that home sales will reach a healthy volume of more than 5 million total annual home sales.

“In the past two years, home buyers have been very successful, with super-low loan default rates, partly because of stable home prices during that time,” he said. “That trend is likely to continue in 2011 as long as there is sufficient demand to absorb inventory.”

Categories: Economy

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