A gauge of signed contracts to purchase previously-owned U.S. homes rose in October by the most in eight months, primarily due to a jump in the South region that had been impacted by hurricanes, according to data released Wednesday from the National Association of Realtors in Washington.
Highlights of Pending Home Sales (October)
- Index rose 3.5% m/m (est. 1% gain) after a 0.4% decrease (revised from unch.)
- Gauge climbed 1.2% y/y on an unadjusted basis after declining a revised 5.7%
Conditions for home ownership remain encouraging, including steady hiring, easier credit availability and borrowing costs that are still historically low. At the same time, price gains and a shortage of listings for Americans to choose from continue to be hurdles, especially for younger buyers and those entering the market for the first time, according to the National Association of Realtors in Washington.
“Home shoppers had better luck finding a home to buy in October, but slim pickings and consistently fast price gains continue to frustrate and prevent too many would-be buyers from reaching the market,” Lawrence Yun, NAR’s chief economist, said in a statement. “Until new home construction climbs even higher and more investors and homeowners put their home on the market, sales will continue to severely trail underlying demand.”
- Purchases advanced 7.4 percent in the South, the most since April 2010; sales rose 2.8 percent in the Midwest and 0.5 percent in the Northeast
- Economists consider pending sales a leading indicator because they track contract signings. Purchases of existing homes are tabulated when a deal closes, typically a month or two later, and the pace of those sales rose to a four-month high in October
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