Pending Home Sales Continue to Show Gains

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, rose 3.7 percent in October and was 31.8 percent higher than October 2008, the National Association of REALTORS reported Tuesday morning. It is the ninth consecutive month that the index increased.

The index showed gains in three of the four regions of the country. In the Northeast, it climbed 19.9 percent during the month and was 44.2 percent above a year ago. In the Midwest, the index rose 11.6 percent and was 36.6 percent higher than October 2008. In the South, it increased 5.4 percent and was 31.6 percent above a year ago. However, the index fell 11.2 percent in the West, but was 21.9 percent above October 2008. 

National Association of REALTORS chief economist Lawrence Yun says that despite these gains, home sales could dip in the coming months. “The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months. Given the lag time, we could see a temporary decline in closed existing-home sales from December until early spring when we get another surge, but the weak job market remains a major concern and could slow the recovery process,” Yun says.