Good News on the Home Front - The National Association of Realtors released its statistics yesterday and reports Pending Home Sales nationally were up 7.3% in November. That’s the highest level recorded in more than 1 ½ years and much better than anticipated by economists! According to NAR, the last time the Pending Home Sales Index was higher was in April 2010 “as home buyers rushed to beat the deadline for the home buyer tax credit.” There are fewer foreclosures on the market which is extremely good news for home sellers. Interest rates are still historically low which is good news for buyers and homeowners who are thinking of refinancing. I think this rise in home sales shows consumers are beginning to show some confidence in the market again plus consumers seem to be more confident in the longevity of their jobs and are ready to invest in their futures again.
Locally, the Memphis market is soaring above the national level. The Memphis Area Association of Realtors reports Home Sales in November were up 28.4% over last year and 2.1% from October this year. According to Leon Dickson, MAAR President, “Sales in November of 2010 were really light, so that has something to do with the huge percentage increase in sales this November, but it is encouraging that the market was more active.” I totally agree, It is definitely encouraging that the market is more active.
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Washington, DC, December 29, 2011
Pending home sales continued to gain in November and reached the highest level in 19 months, according to the National Association of Realtors®.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, increased 7.3 percent to 100.1 in November from an upwardly revised 93.3 in October and is 5.9 percent above November 2010 when it stood at 94.5. The October upward revision resulted in a 10.4 percent monthly gain.
The last time the index was higher was in April 2010 when it reached 111.5 as buyers rushed to beat the deadline for the home buyer tax credit. The data reflects contracts but not closings.
Lawrence Yun, NAR chief economist, said the gains may result partially from delayed transactions. “Housing affordability conditions are at a record high and there is a pent-up demand from buyers who’ve been on the sidelines, but contract failures have been running unusually high. Some of the increase in pending home sales appears to be from buyers recommitting after an initial contract ran into problems, often with the mortgage,” he said.
“November is doing reasonably well in comparison with the past year. The sustained rise in contract activity suggests that closed existing-home sales, which are the important final economic impact figures, should continue to improve in the months ahead,” Yun added.
Pending home sales are not affected by the recently published rebenchmarking of existing-home sales because the index uses a different methodology based directly on contract signings, and is adjusted for seasonality.
The PHSI in the Northeast rose 8.1 percent to 77.1 in November but is 0.3 percent below November 2010. In the Midwest the index increased 3.3 percent to 91.6 in November and is 9.5 percent above a year ago. Pending home sales in the South rose 4.3 percent in November to an index of 103.8 and remain 8.7 percent above November 2010. In the West the index surged 14.9 percent to 121.2 in November and is 2.9 percent higher than a year ago.
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