The National Association of Realtors (NAR) reported this morning that signed home contracts rose for the ninth consecutive month in October. Even better, it was the largest rise since the NAR started the index in 2001.
The Pending Home Sales Index is out of a score of 100, with 100 being the average level of contract activity in 2001. Between September and October, the index rose 3.7 percent to 114.1. A year ago, the index was at 86.6, making the increase the biggest year-over-year gain ever.
In its analysis, NAR divides the country up into sections (Northeast, Midwest, South and West) and then provides more statistics for each area. The index in the South, which includes the DC Metro area, increased 5.4 percent to 115.4, which is 31.6 percent above a year ago.
Lawrence Yun, NAR’s chief economist, attributes the good news to (surprise, surprise) the extended first-time homebuyer’s tax credit:
“The tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.”
While the news is both good and unexpected (experts had predicted a one percent drop in signed contracts), Yun cautioned that the increasing numbers of pending sales would likely decrease in coming months:
“The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months. Given the lag time, we could see a temporary decline in closed existing-home sales from December until early spring when we get another surge, but the weak job market remains a major concern and could slow the recovery process.”
This article originally published at https://dc.urbanturf.com/articles/blog/signed_contracts_on_homes_rise_for_ninth_straight_month/1563.
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