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Tuesday, January 1, 2013

Pending-Home Sales Reach Highest Level in 2.5 Years

Pending-home sales increased in November for the third straight month and reached the highest level in more than two years, according to the National Association of Realtors.

NAR’s Pending Home Sales Index, which measures the number of homes that are under contract, rose 1.7% in November. That’s up 9.8% from last November 2011.

The index hasn’t been this high since April 2010 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.

Home sales are on a sustained uptrend even though home buyers face challenges getting mortgages, said NAR Chief Economist Lawrence Yun. “Even with market frictions related to the mortgage process, home contract activity continues to improve. Home sales are recovering now based solely on fundamental demand and favorable affordability conditions,” he said.

Yun predicted existing-home sales will rise 8% to 9% in 2013 to approximately 5.1 million, following a 10% gain expected for all of 2012. The median existing-home price is projected to rise just over 4% in 2013, after rising more than 7% in 2012, he added.

Regional pending home sales
The number of homes under contract improved in all regions of the country except the South, where they held steady. Here’s how the regions performed:

  • Northeast: Up 5.2% in November and 15.2% above November 2011.
  • Midwest: Up 0.1% in November and 15.2% above November 2011.
  • South: Unchanged in November and 13.9% above November 2011.
  • West: Up 4.2% in November, but 3.2% below November 2011 with inventory constraints limiting sales.
Source: National Associaiton of Raltors

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