Industry News and Notes
Pending Home Sales Rise for Record Eight Straight Months!
RISMEDIA, November 3, 2009 - Pending home sales rose again, marking eight consectutive monthly gains - the longest since measurement began in 2001, according to the National Association of Realtors.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in September 2009, rose 6.1% to 110.1 from a reading of 103.8 in August, and is 21.2% higher than September 2008 when it stood at 90.9. The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8.
Lawrence Yun, NAR chief economist, said the momentum is understandable. "What we're witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month," he said. "Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery."
NAR estimates approximately 3 million renters are now financially well-qualified to buy a median-priced home. "As long as buyers do not overstretch and stay well within their budget, a sizeable pent-up demand can be tapped among financially qualified potential buyers," Yun said. "Although the tax credit is greatly reviving the existing home market, new-home sales may continue to struggle as home builders hold back production to drive down inventory. In addition, there remains an ongoing credit crunch for construction loans."
The Pending Home Sales Index in the Northeast slipped 2.0% to 83.6 in September but remains 16.9% above September 2008. In the Midwest the index rose 8.1% to 98.2 in September and is 17.8% higher than a year ago. In the South, pending home sales increased 4.9% to an index of 109.7 and is 22.8% above September 2008. In the West the index jumped 10.2% to 143.8 and is 23.7% above a year ago.
Yun added that strong near-term reports should not be overstated. "We're clearly not out of the woods because an excess of homes remains on the market despite recent improvements," he said. "Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this incoming inventory."
Testimonials (view all)
"Our building experience with Distinctive Designs exceeded our expectations. Throughout the entire building process, from initial design to the completed home, we encountered excellent construction quality and superior customer service. Jeff Wulbrun and his entire team worked with us each step of the way to tailor our home design to meet our family's needs while at the same time providing us with a beautiful, modern, well-built home that stayed within our budget. Jennie Wulbrun's design experience assisted us in choosing interior finishes that coordinated beautifully and fit our unique style. We also did not have to worry over details during the construction process thanks to Tony Young's contruction management - we were always informed of the schedule and issues requiring our attention. We thoroughly recommend purchasing a Distinctive Designs home for a superb building experience and are proud to welcome others to our home as a gathering place for family and friends. Our only regret is that we don't foresee building with them again soon - we don't want to ever leave our new home for a long time!"
Industry News and Notes (view all)
Newsletter Signup
Signup to receive industry news, tips, and resources you can use for buying and building your next home.