Pending Home Sales Up 12.4% From Last Year

Existing home sales could see a boost next month, according to an industry survey that looks at contracts that have been signed but not yet finalized.

The Pending Home Sales Index rose 6.4% in August to its highest level in more than two years. In the last 12 months signed contracts have advanced by 12.4%.

“The rise in pending home sales shows buyers are returning to the market,” said Lawrence Yun, chief economist at the National Association of Realtors, who publish the report. 

Yun was cautious in his predictions however, noting that not all deals are closing on time “because of long delays related to short sales, and issues regarding complex new appraisal rules,”

He added, “No doubt many first-time buyers are rushing to beat the deadline for the $8,000 tax credit, which expires at the end of next month.”

The 6.4% increase marks the seventh straight advance for the survey, noted Deutsche Bank’s Joseph LaVorgna. “This should mitigate some of the markets' concern regarding last week's unexpected decline in August existing home sales because pending home sales lead existing home sales,” he added.

Regionally, contracts in the Northeast jumped 8.2%, while the Midwest rose 3.1%, the South increased 0.8%, and the West surged 16.0%.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.