Based on contract signings, the Pending Home Sales Index (PHSI) increased 5.2 percent to 104.8 in October from an upwardly revised 99.6 in September. As a result, the PHSI is 13.2 percent above October 2011, 92.6. The data reflect contracts but not closings.
“We’ve had excellent housing affordability conditions for quite some time, but we’re seeing more impact now from steady job creation and rising consumer confidence about home buying now that home prices have clearly turned positive,” says Lawrence Yun, NAR chief economist.
Outside of a few spikes during the tax credit period, pending home sales are the highest since March 2007, when the index also reached 104.8. On a year-over-year basis, pending home sales have risen for 18 months.
Yun says there are clear regional patterns: “Contract activity surged in the Midwest and shows very healthy gains in the South, but was down slightly in the Northeast and West.”
“The Northeast saw some impact from Hurricane Sandy, but limited inventory in the West is keeping a lid on the market. All regions are up from a year ago, with double-digit gains in every region but the West,” says Yun.
The PHSI in the Northeast slipped 0.1 percent to 79.2 in October, but it’s 13.3 percent above a year ago. In the Midwest, the index jumped 15.6 percent to 104.4 in October, 20.0 percent above October 2011.
Pending home sales in the South rose 5.5 percent to an index of 117.3 in October, and it’s 17.4 percent higher than a year ago. In the West, the index declined 1.1 percent in October to 105.7, but it’s 0.9 percent above October 2011.
© 2012 Florida Realtors®
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