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Pending Home Sales Show Slight Improvement October 25, 2012, 10:33 AM By Sarah Portlock and Alan Zibel The number of U.S. home buyers signing contracts to purchase previously owned homes inched up slightly in September, indicating that home sales could be leveling off but are still well above last year. The National Association of Realtors said Thursday its seasonally adjusted index for pending sales of existing homes increased 0.3% in September from a month earlier to a reading of 99.5. The index for September was up 14.5% from the same month last year. Pending home sales have risen for 17 consecutive months compared with a year earlier. ”Activity remains at an elevated level in contrast with recent years, but currently appears to be bouncing around in a narrow range,” said Lawrence Yun, the Realtors’ chief economist. The index was far below expectations. Economists surveyed by Dow Jones Newswires had predicted pending home sales would increase 2.8% from August’s figures. The numbers disappointed market expectations, said Gennadiy Goldberg with TD Securities. “While we maintain a constructive view on the U.S. housing market, the tepid September pending home sales report could temper some of the market’s more bullish views on the housing recovery,” Mr. Goldberg wrote in a research note. “The weaker report also foreshadows a very tepid pace of existing home sales in October.” The housing market has recovered from the severe downturn, but still has weak spots. Sales of previously owned homes dipped last month amid a thin supply of homes up for sale, the Realtors’ group said last week. Existing-home sales decreased 1.7% from a month earlier to a seasonally adjusted annual rate of 4.75 million. Sales were still 11% above the same month a year earlier. However, the Commerce Department said Wednesday sales of newly built homes rose to its highest level in more than two years, increasing 5.7% last month from August to a seasonally adjusted annual rate of 389,000. And construction of new homes jumped 15% last month to the highest level since July 2008. The Realtors’ index tracks agreements to purchase homes. A sale is considered pending when the contract has been signed but the transaction has not yet closed, and pending sales typically close within one or two months of signing. A reading of 100 is equal to the average level of activity in 2001. The Realtors’ report showed pending sales rose in three out of four U.S. regions compared with a month earlier. The index rose 4.3% in the West, 1.4% in the Northeast and 1.0% in the South but dropped 5.8% in the Midwest. https://blogs.wsj.com/developments/2012/10/25/pending-home-sales-show-slight-improvement/
