January 8, 2013 (Chris Moore)

Signed contracts for the purchase of existing homes continued to improve for the third consecutive month in November according to the National Association of Realtors® (NAR) Pending Home Sales Index (PHSI).

Contract signings increased by 1.7 percent to 106.4 in November from 104.6 in October and were 9.8 percent higher than in November of last year when the Index was at 96.9.

Last month’s gain put the Index at just below April 2010’s levels when home purchasing activity had been artificially inflated by the home buyer tax credit.

Lawrence Yun, chief economist of NAR, stated, “Even with market frictions related to the mortgage process, home contract activity continues to improve. Home sales are recovering now based solely on fundamental demand and favorable affordability conditions.”

Three of the four regions in the Index posted increases in their monthly level of sales contract activity, while one region remained unchanged. Only two of the four regions reported a higher level of contract signings compared to a year ago with one region also reporting that signings had remained unchanged

The Northeast posted the largest increase, climbing 5.2 percent from the previous month while the West followed with a gain of 4.2 percent.

The Midwest edged slightly higher with a 0.1 percent gain from last month while the South remained unchanged from the previous month.

The Northeast and the Midwest reported the largest increase in contract signings compared to November of last year with matching 15.2 percent gains, while the South remained unchanged from last year and the West posted a decline of 3.2 percent..

The PHSI is a forward looking indicator which generally indicates closings one to two months in the future.

Tags: pending home sales, existing home sales, contract signings

National Association of Realtors