Demand in the Northeast and West drove an increase in pending home sales in November to the highest level in 2 1/2 years.
Pending home sales grew by 1.7 percent from October to November and were up 9.8 percent from a year ago, reaching their highest level since April 2010, when buyers were rushing to claim an expiring federal homebuyer tax credit, the NATIONAL ASSOCIATION OF REALTORS® reported.
It was the third consecutive month-over-month increase in NAR’s Pending Home Sales Index, which tracks homes under contract that haven’t yet closed. Pending home sales have posted annual gains for 19 consecutive months, NAR said.
“Even with market frictions related to the mortgage process, home contract activity continues to improve,” NAR Chief Economist Lawrence Yun said in a statement. “Home sales are recovering now based solely on fundamental demand and favorable affordability conditions.”
NAR is projecting 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. NAR expects the median existing-home price to increase by about 4 percent in 2013, after posting a 7 percent gain in 2012.
In the Northeast, the Pending Home Sales Index rose 5.2 percent from October to November, to 83.3, up 15.2 percent from a year ago.
In the Midwest, the index was essentially unchanged from October to November, rising 0.1 percent to 103.8. Looking back a year, the index was up 15.2 percent in the Midwest.
Pending home sales in the South were unchanged from October to November. The index reading of 117.2 represented a 13.9 percent gain from a year ago.
In the West, the index was up 4.2 percent from October to November, but at 110.1 was down 3.2 percent from a year ago, as scarce inventory limited sales.
An index value of 100 is equal to the average level of contract activity during 2001, the first year to be examined and a year in which sales fell within a normal range for the current U.S. population.