For the ninth straight month the number of homebuyers who signed contracts to buy previously occupied homes rose in October which was most likely a direct result of buyers racing to take advantage of the federal first-time homebuyers tax credit that was due to expire on November 30th.
Signed contracts are used as a tool to determine future home sales statistics since typically there is a one or two month lag time between a signed contract and the closing of escrow.
Today the National Association of Realtors reported that its seasonally adjusted index of sales agreements went up 3.7 percent from September to October to 114.1 which was the highest reading since March 2006; almost 32 percent above a year ago. Amazingly that is the largest annual increase ever for the index since it has been used to track home sales.
This even surprised some economists because they had expected that the seasonally adjusted index would fall to 109.5.
Every part of the nation experienced year-over-year gains in pending home sales in October. However, back in September, the West was the only area that did not have an increase.
The National Association of Realtors chief economist, Lawrence Yun, said today that, "the weak economy and high unemployment could slow the housing recovery, but I expect home prices and conditions to stabilize by midyear."