Pending home sales rose in November, according to new data released by the National Association of Realtors (NAR), which adds this marks a five-month trend that may indicate a ‘gradual recovery’ into 2011.
NAR's Pending Home Sales Index rose 3.5% to 92.2 based on contracts signed in November, up from 89.1 in October. The index is 5% below a reading of 97 in November 2009. Lawrence Yun, NAR chief economist, believes that this could help stimulate the economy to a faster recovery.
‘If we add two million jobs as expected in 2011, and mortgage rates rise only moderately, we should see existing-home sales rise to a higher, sustainable volume,’ says Yun. ‘Credit remains tight, but if lenders return to more normal, safe underwriting standards for creditworthy buyers, there would be a bigger boost to the housing market and spillover benefits for the broader economy.’
The NAR predicts that existing-home sales will rise about 8% to 5.2 million in 2011, up from 4.8 million in 2010, with an additional gain of 4% in 2012. The organization also predicts that the median existing-home price could rise 0.6% to $173,700 in 2011 from $172,700 in 2010, which was essentially unchanged from 2009. New-home sales are estimated to rise 24% to 392,000 in 2011, but would remain well below historic averages, while housing starts are forecast to rise 21% to 716,000.
‘As we gradually work off the excess housing inventory, supply levels will eventually come more inline with historic averages and could allow home prices to rise modestly in the range of two to three percent in 2012,’ Yun says.
SOURCE: National Association of Realtors