Its Pending Home Sales Index, a forward looking indicator based on contract signings, edged up 0.3% to 99.5 in September from 99.2 in August and is 14.5% above September 2011 when it was 86.9. The data reflect contracts but not closings.
Lawrence Yun, NAR chief economist, said pending home sales continue to hold a higher ground. ‘Home contract activity remains at an elevated level in contrast with recent years, but currently appears to be bouncing around in a narrow range. This means only minor movement is likely in near term existing-home sales, but with positive underlying market fundamentals they should continue on an uptrend in 2013,’ he explained.
Pending home sales have risen for 17 consecutive months on a year on year basis, leading to the solid recovery seen in closed existing home sales this year. In September all regions were showing double digit increases in contract activity from a year ago with the exception of the West, which is constrained by limited inventory.
The PHSI in the Northeast rose 1.4% to 79.3 in September and is 26.1% higher than a year ago. In the Midwest the index fell 5.8% to 89.5 in September but is 19.3% above September 2011. Pending home sales in the South increased 1% to an index of 111.5 in September and are 17.6% higher than a year ago. In the West the index rose 4.3% in September to 106.9, but is only 0.8% above September 2011.
Housing affordability conditions are forecast to remain favourable through next year, with the 30 year fixed rate mortgage staying near record lows for the balance of this year but gradually rising to 4% in the second half of 2013.
Completed existing home sales in 2012 will total close to 4.6 million, an increase of 9%, according to NAR and are projected to rise about 9% in the next year to nearly 5.1 million. With notably lower housing inventory, the national median existing home price is expected to increase 6% this year and 5% in 2013.
