Skip to main content

NAR Reports Slight Market Rebound With 10.4 Percent Rise in Pending Home Sales

Dec 02, 2010

Pending home sales jumped in October, showing a positive uptrend since bottoming in June, according to the National Association of Realtors (NAR). NAR's Pending Home Sales Index (PHSI), a forward-looking indicator, rose 10.4 percent to 89.3 based on contracts signed in October from 80.9 in September. The index remains 20.5 percent below a surge to a cyclical peak of 112.4 in October 2009, which was the highest level since May 2006 when it hit 112.6. Last October, first-time homebuyers were motivated to make offers before the initial contract deadline for the tax credit last November. The data reflects contracts and not closings, which normally occur with a lag time of one or two months. “It is welcoming to see a solid double-digit percentage gain, but activity needs to improve further to reach healthy, sustainable levels," said Lawrence Yun, NAR chief economist. "The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market and consequential boost to household formation will help the recovery process going into 2011. More importantly, a return to more normal loan underwriting standards and removal of unnecessary underwriting fees for very low risk borrowers is needed and could quickly help in the housing and economic recovery. Recent loan performance data from Fannie Mae and Freddie Mac clearly demonstrates very low default rates on recently originated mortgages, much lower that the vintages of 2002 and 2003 before the housing boom." The PHSI in the Northeast jumped 19.6 percent to 71.3 in October but is 27.3 percent below the tax credit peak in October 2009. In the Midwest the index surged 27.3 percent in October to 81.7 but is 24.8 percent below a year ago. Pending home sales in the South rose 7.1 percent to an index of 93.8 but are 18.4 percent below October 2009. In the West the index slipped 0.4 percent to 104.3 and is 15.6 percent below a year ago. Near term, Yun expects home sales will continue to climb from their cyclical low this past summer. “Even so, we now have some consumer concerns regarding the mortgage interest deduction, an important component in housing affordability,” said Yun. “Preliminary results of a new survey show nearly three out of four home owners and two out of three renters consider the mortgage interest deduction to be extremely or very important to them. Home owners already pay between 80 and 90 percent of all federal income taxes and additional tax burden would hurt them and the economic recovery, so we have a reasonable hope that it will not be changed.” For more information, visit www.realtor.org.
About the author
Published
Dec 02, 2010
About $18.6 Million Severance Payout For First American Ex-CEO Kenneth DeGiorgio

Rather than a brusque exit, high-performer DeGiorgio eligible to catch a soft breeze off into the horizon

Apr 23, 2025
New VantageScore Credit Model Aims To Boost Predictive Performance

Also, company’s pilot program gives nonprofit lenders access to modern credit scoring while helping them maintain sound lending practices

Apr 22, 2025
Mortgage Women Leadership Council Breaks 500-Member Benchmark

Becomes nation’s largest organization for women in the industry

Apr 21, 2025
Tug-Of-War Continues Between President Trump, Fed Chair Powell Over Rate Cuts

President’s April 17 social media post expresses growing impatience with Federal Reserve Board not cutting rates

Apr 18, 2025
Mortgage Insurance Premium Tax Write-Off Back On The Table

Bipartisan bill would restore, expand expired MIP deduction, aiming to ease homeownership costs for millions

Apr 15, 2025
FBI Boston Warns Of Growing Title Fraud

Fraudsters forging documents to sell properties or take out mortgages on them, FBI says

Apr 14, 2025