2012 Home Sales: Positives on Many Fronts~ Whats holding you back?
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| In the video, Yun talks about what the latest figures mean. |
http://link.brightcove.com/services/player/bcpid424522365001?bckey=AQ~~,AAAAAFdYoqM~,hGPKFRRe3LpAGaKyoT1OjRv3WPzoHah_&bctid=1349318834001
NAR released its latest pending home sales index figure last week and for the second month in a row the index is up. But more than that, the index has broken 100. This is significant because the only time since the housing boom collapsed that the index has broken 100 is when the home owner tax credit was in effect. The fact that the index has returned to that level a year since the credit has been in effect means the housing market is strengthening completely on its own, without any stimulus. NAR Chief Economist Lawrence Yun is upbeat about 2012 because in a number of areas indicators are pointing upward. Not only are home sales up but housing starts are up and home prices are stabilizing in many markets and heading up in some. In areas where they’re still down, the declines aren’t that great. More fundamentally, broader U.S. economic signs are looking positive, including the all-important jobs picture. About 100,000 job are being created a month, and that could rise to 150,000—still not a quick enough pace to get us back to where we were before the downturn but the headwinds are in the right direction.
Pending Home Sales Jump
Pending home sales posted a strong increase in November, rising to their highest level in more than a year and a half, the National Association of Realtors (NAR) has reported.
Signed contracts to purchase homes were up a seasonally adjusted 7.3 percent for the month, putting the NAR's Pending Home Sales Index at a rating of 100.1, a reading it says coincides with sales that are "historically healthy." It's the highest the index has been since April 2010, when buyers were rushing to beat the deadline for the homebuyer tax credit.
Pent-up demand appeared to be a factor in the increase, according to Lawrence Yun, NAR chief economist. Buyers who recommitted to a purchase after running into problems on their initial purchase offer also played a role, he said.
"November is doing reasonably well in comparison with the past year," Yun said. "The sustained rise in contract activity suggests that closed existing-home sales, which are the important final economic impact figures, should continue to improve in the months ahead."
On an annual basis, November 2011 pending sales were up 5.9 percent compared to 12 months earlier. Figures for October 2011 were also revised upward this month to reflect a 10.4 percent monthly gain.
The pending sales figures are not affected by the recent "rebenchmarking" the NAR performed that significantly revised downward its figures for existing home sales, because the two surveys use different methodologies, according to the NAR.
On a regional basis, pending sales showed the strongest monthly increase in the Western United States, with the index up 14.9 percent over October's level, though producing an annual gain of only 2.9 percent. The Northeast showed a healthy monthly gain of 8.1 percent, although that wasn't enough to offset a 0.3 percent decline over the past 12 months.
In the other two major regions, the Midwest showed the strongest annual gain, up 9.3 percent compared to November 2010, with a monthly increase of 3.3 percent, while the South showed gains of 8.7 percent annually and 4.3 percent for the month.
The NAR Pending Sales Index is based on a scale where a reading of 100 reflects the average level of sales contracts signed in 2001, the first year of the index. The index typically precedes actual sales activity by one to two months, given the time needed to close sales.
Signed contracts to purchase homes were up a seasonally adjusted 7.3 percent for the month, putting the NAR's Pending Home Sales Index at a rating of 100.1, a reading it says coincides with sales that are "historically healthy." It's the highest the index has been since April 2010, when buyers were rushing to beat the deadline for the homebuyer tax credit.
Pent-up demand appeared to be a factor in the increase, according to Lawrence Yun, NAR chief economist. Buyers who recommitted to a purchase after running into problems on their initial purchase offer also played a role, he said.
"November is doing reasonably well in comparison with the past year," Yun said. "The sustained rise in contract activity suggests that closed existing-home sales, which are the important final economic impact figures, should continue to improve in the months ahead."
On an annual basis, November 2011 pending sales were up 5.9 percent compared to 12 months earlier. Figures for October 2011 were also revised upward this month to reflect a 10.4 percent monthly gain.
The pending sales figures are not affected by the recent "rebenchmarking" the NAR performed that significantly revised downward its figures for existing home sales, because the two surveys use different methodologies, according to the NAR.
On a regional basis, pending sales showed the strongest monthly increase in the Western United States, with the index up 14.9 percent over October's level, though producing an annual gain of only 2.9 percent. The Northeast showed a healthy monthly gain of 8.1 percent, although that wasn't enough to offset a 0.3 percent decline over the past 12 months.
In the other two major regions, the Midwest showed the strongest annual gain, up 9.3 percent compared to November 2010, with a monthly increase of 3.3 percent, while the South showed gains of 8.7 percent annually and 4.3 percent for the month.
The NAR Pending Sales Index is based on a scale where a reading of 100 reflects the average level of sales contracts signed in 2001, the first year of the index. The index typically precedes actual sales activity by one to two months, given the time needed to close sales.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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