Pending home sales in the U.S. rose for the third straight month in November, according to a report released by the National Association of Realtors on Friday, with the pending home sales index reaching its highest level in well over two years.
NAR said its pending home sales index rose 1.7 percent to 106.4 in November from a downwardly revised 104.6 in October. Economists had been expecting the index to increase by about 1.8 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
With the increase, the pending home sales index rose to its highest level since coming in at 111.3 in April of 2010, when sales were boosted by a homebuyer tax credit.
NAR noted that the index is at its highest level since February of 2007 when excluding the months affected by tax stimulus.
Lawrence Yun , NAR chief economist, said, "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."
The report said the pending home sales index for November is up by 9.8 percent compared to the same month a year ago, reflecting the nineteenth consecutive month of year-over-year growth.
The monthly increase in pending home sales reflected notable growth in the Northeast and West, where pending home sales rose by 5.2 percent and 4.2 percent, respectively.
Pending home sales in the Midwest edged up by a more modest 0.1 percent, while pending home sales in the South were unchanged.
NAR said the upward momentum means existing-home sales should rise 8 to 9 percent in 2013 following the 10 percent increase expected for 2012.
Last week, NAR released a separate report showing that existing home sales rose by more than expected in November, jumping to a three-year high.
The report said existing home sales rose 5.9 percent to an annual rate of 5.04 million in November from a downwardly revised 4.76 million in October. Economists had expected existing home sales to climb to 4.90 million from the 4.79 million originally reported for the previous month.
With the bigger than expected increase, existing home sales rose to their highest level since spiking to 5.44 million in November of 2009.
The Commerce Department released a report on Thursday showing that new home sales rebounded in November, reaching their highest level in over two years.
The report said new home sales rose 4.4 percent to a seasonally adjusted annual rate of 377,000 from the revised October rate of 361,000. The increase comes after new home sales fell by 3.5 percent in October.
The rebound lifted new home sales to their highest annual rate since April of 2010, when sales were boosted by the homebuyer tax credit.
by RTT Staff Writer
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