The National Association of Realtors (NAR) Wednesday morning released its data on pending sales of existing homes for October. The pending home sales index ticked up 0.1 point (up 0.1%) to 110 from a downwardly revised September reading of 109.9. The October reading is up 1.8% year over year.
October sales in three of four NAR regions improved, but not enough for the index to show a significant gain.
The consensus estimate called for a month-over-month increase of 0.8% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.
The index has been above 100 (the “average” reading) for 26 straight months.
The NAR’s chief economist noted:
Most of the country last month saw at least a small increase in contract signings and more notably, activity in all four major regions is up from a year ago. Despite limited listings and steadfast price growth that’s now carried into the fall, buyer demand has remained strong because of the consistently reliable job creation in a majority of metro areas. … Many of the successful shoppers in October likely had to move fast and outbid others for the few listings available in the affordable price range. Those obtaining a mortgage last month were likely the last group of buyers to lock in a rate near historically low levels now that rates have marched to around 4 percent since the election.
2016 existing-homes sales are now forecast rise about 2.1% to around 5.36 million, and the highest annual pace since 2006 (6.48 million). In 2015, existing-home sales rose 6.3% and prices rose 6.8%.
By region, October pending home sales increased by 0.4% to an index score of 96.9 in the Northeast, up 3.9% compared with October 2015. In the South, sales slipped 1.3% to an index score of 120.1, 0.8% higher than last year’s index.
Sales rose by 0.7% in the West to an index score of 108.3, up 2.5% year over year for the month, and sales in the Midwest rose by 1.6% to an October index score of 106.3, now 1.2% higher than October 2015.