Pending home sales continued to gain in November and reached the highest level in 19 months, according to the National Association of Realtors (NAR).
The NAR 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 homebuyer tax credit. The data reflects contracts, but not closings.
An index reading of 100 is equal to the average level of contract activity during 2001.
Lawrence Yun, NAR chief economist, said the gains may have resulted 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,” Yun 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.”
By region, pending home sales rose 14.9 percent in the West, 8.1 percent in the Northeast, 4.3 percent in the South and 3.3 percent in the Midwest.
