Contract signings for home purchases surged in October, rising 10.4% compared to September, according to data released today by the National Association of Realtors (NAR). The association's Pending Home Sales Index rose to 93.3 for the month, to a reading 9.2% above October 2010.
Lawrence Yun, chief economist at NAR, said in a statement that he was "encouraged by these latest figures because all the factors for higher home sales are present," pointing to high levels of affordability and rising rent costs. "We hope this indicates more buyers are taking advantage of the excellent affordability conditions."
However, the index hasn’t been particularly reliable lately: Contract signings were up in May and June, but sales deteriorated in July; pending sales then went down in July, August, and September, only to see sales rise in August and October.
Rising numbers of cancellations have also thrown a wrench into pending sales’ predictive ability, and that trend has been gaining. In October, 33% of Realtors surveyed by NAR reported cancellations, compared to 18% in September.
On a regional basis, the Midwest saw the largest gain in pending sales, with a 24.1% jump to an index reading of 88.7. The Northeast was second with a 17.7% gain to a reading of 71.3 in October. The South rose 8.6% to a reading of 99.5, and the West dipped 0.3% to a reading of 105.5. All regions were above their year-ago levels.
Claire Easley is senior editor, online, at Builder.