Feb. 2, 2010
REALTORS: Pending Home Sales Stabilize, Remain Above Year-Ago Levels
By David M. Kinchen
Huntingtonnews.net Real Estate Writer
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed in December, increased 1.0 percent to 96.6 from 95.6 in November, and remains 10.9 percent above December 2008 when it was 87.1, according to a report issued Tuesday, Feb. 2, 2010 by the National Association of Realtors (NAR).
In November, the monthly index had fallen by 16.4 percent from surging activity in preceding months as pending home sales leveled from a market swing driven by response to the home buyer tax credit, the NAR report said.
NAR chief economist Lawrence Yun said it’s important to recognize how the tax credit is skewing market data. “There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded,” he said. “These swings are masking the underlying trend, which is a broad improvement over year-ago levels. December activity was the fifth highest monthly tally in two years.”
Buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30, 2010, to finalize the transaction to qualify for a tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.
The PHSI in the Northeast rose 2.3 percent to 76.1 in December -- 14.9 percent higher than December 2008. In the Midwest the index increased 5.2 percent to 86.9 and is 8.7 percent above a year ago. Pending home sales in the South rose 2.2 percent to an index of 98.4, and are 5.5 percent higher than December 2008. In the West the index fell 3.8 percent to 119.9 but is 18.6 percent above a year ago.
Yun predicts that the extended and expanded tax credit will encourage 2.4 million households to take the credit in 2010. “While new-home sales will remain low due to a lack of construction, existing-home sales are projected to rise to around 5.6 million in 2010,” Yun said. Last year there were 5.16 million existing-home sales.
Sales of new single-family homes fell 7.6 percent in December to a seasonally adjusted annual rate of 342,000 units, according to figures released late in January by the U.S. Commerce Department.
On an annual basis, year-end figures from the Commerce Department showed that an estimated 374,000 new homes were sold in 2009. This was down nearly 23 percent from 2008 and was the lowest number of new-home sales since the government started keeping track in 1963.
The news came a few days after the NAR reported that existing home sales fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million units in December from 6.54 million in November, but remain 15 percent above the 4.74 million-unit level in December 2008.
One of the greatest benefits of rising sales will be firming home prices, Yun added: “For several months now we’ve been seeing stabilization in all of the home price measures as inventory is pulled down. As a result, the housing wealth for many middle class families has begun to stabilize.”
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REALTORS: Pending Home Sales Stabilize, Remain Above Year-Ago Levels
By David M. Kinchen
Huntingtonnews.net Real Estate Writer
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed in December, increased 1.0 percent to 96.6 from 95.6 in November, and remains 10.9 percent above December 2008 when it was 87.1, according to a report issued Tuesday, Feb. 2, 2010 by the National Association of Realtors (NAR).
In November, the monthly index had fallen by 16.4 percent from surging activity in preceding months as pending home sales leveled from a market swing driven by response to the home buyer tax credit, the NAR report said.
NAR chief economist Lawrence Yun said it’s important to recognize how the tax credit is skewing market data. “There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded,” he said. “These swings are masking the underlying trend, which is a broad improvement over year-ago levels. December activity was the fifth highest monthly tally in two years.”
Buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30, 2010, to finalize the transaction to qualify for a tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.
The PHSI in the Northeast rose 2.3 percent to 76.1 in December -- 14.9 percent higher than December 2008. In the Midwest the index increased 5.2 percent to 86.9 and is 8.7 percent above a year ago. Pending home sales in the South rose 2.2 percent to an index of 98.4, and are 5.5 percent higher than December 2008. In the West the index fell 3.8 percent to 119.9 but is 18.6 percent above a year ago.
Yun predicts that the extended and expanded tax credit will encourage 2.4 million households to take the credit in 2010. “While new-home sales will remain low due to a lack of construction, existing-home sales are projected to rise to around 5.6 million in 2010,” Yun said. Last year there were 5.16 million existing-home sales.
Sales of new single-family homes fell 7.6 percent in December to a seasonally adjusted annual rate of 342,000 units, according to figures released late in January by the U.S. Commerce Department.
On an annual basis, year-end figures from the Commerce Department showed that an estimated 374,000 new homes were sold in 2009. This was down nearly 23 percent from 2008 and was the lowest number of new-home sales since the government started keeping track in 1963.
The news came a few days after the NAR reported that existing home sales fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million units in December from 6.54 million in November, but remain 15 percent above the 4.74 million-unit level in December 2008.
One of the greatest benefits of rising sales will be firming home prices, Yun added: “For several months now we’ve been seeing stabilization in all of the home price measures as inventory is pulled down. As a result, the housing wealth for many middle class families has begun to stabilize.”
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