Pending home sales rose strongly nationwide in October, remaining up by 9.2 percent year-over-year, according to the October pending home sales report from the National Association of Realtors, released today.
The Pending Home Sales Index, which measures signed real estate contracts for existing single-family homes, condominium and co-op units, rose to 93.3 in October from 84.5 in September. In October 2010, the index was 85.5.
The Pending Home Sales Index in the Northeast surged 17.7 percent to 71.3 in October and was 3.4 percent above October 2010’s index.
“Home sales have been plodding along at a sub-par level while interest rates are hovering at record lows and there is a pent-up demand from buyers who normally would have entered the market in recent years,” said Lawrence Yun, chief economist at NAR.
Yun also indicated that record low default rates and a decline in inventory due to less building after the recession hit could be factors driving the optimistic numbers.
Yun was also cautious. “Although contract signings are up, not all contracts lead to closings,” he said. Many potential buyers make mistakes with their credit while applying for mortgages and are NOT approved. Tighter regulations for mortgages surely contribute. — Guelda Voien