(Photo: David Zalubowski, AP)
WASHINGTON -- The National Association of Realtors says its
pending home sales index, which measures contracts to buy homes,
increased last month to its highest level in two and a half years.
It's the latest sign of improvement in the battered housing market.
NAR said its seasonally adjusted index rose 1.7% in November from
October to 106.4. That's the highest since April 2010, when a homebuyer
tax credit caused a spike in sales. And excluding those months when the
tax credit was available, it's the best reading since February 2007.
increase points to higher sales of previously occupied homes in the
coming months. There's generally a one- to two-month lag between a
signed contract and a completed sale.
Signed contracts to buy
homes rose in the Northeast and West, and ticked up slightly in the
Midwest. They were unchanged in the South.
Home sales are on track
to rise 10% this year to their highest level in five years, buoyed by
ultra-low mortgage rates and steady job gains.
recovery that began earlier this year is looking sustainable for a
number of reasons. The supply of previously occupied homes for sale has
finally thinned out and is at an 11-year low. At the same time, more
people are looking to buy or rent a home after living with relatives or
friends during and in the aftermath of the Great Recession.
combination of stronger demand and limited supply is pushing up home
prices. That could encourage more sellers to put their homes on the
market because they can expect a better price.
Builders are also
more optimistic that the recovery will endure and are stepping up
construction. The pace of home construction was nearly 22% higher in
November compared with a year earlier. Builders are on track this year
to start work on the most homes in four years.