The housing sector continues to remain sluggish, despite all the governmental policies, and so far most accounts regarding this business have been grim. The good news is that according to the data, U.S. home sales improved in November, going up 7.3 percent.
The National Association of Realtors (NAR) published today the figures on the index of pending home sales in the United States for November. According to their report, U.S. home sales managed to beat Bloomberg’s forecast and hit the highest level since April 2010. Bloomberg surveyed several economists that estimated only a 1.5 percent gain for November’s U.S. home sales.
At the same time, the association’s report also showed an index level for pending home sales of 100.1 on a seasonally adjusted basis. Any ranking over 100 is a good sign, plus it also mark the average level of contract activity in 2001, a time considered to be “historically healthy” for real estate.
As stated by analysts, the 7.3 percent increase of the previous month is due to falling prices and low borrowing costs that finally became more appealing to buyers. Plus, the whole sector seems to be improving at a faster pace, as construction projects and builder confidence expand and the number of existing homes on the market declines.
Pierre Ellis, analyst at Decision Economics, believes buyers are “feeling comfortable with their personal situations and with the house-price trend”.
The association also pointed out that some of the increase is attributed to “buyers recommitting after an initial contract ran into problems, often with the mortgage”. NAR chief economist Lawrence Yun added that even if “housing affordability conditions are at a record high and there is a pent-up demand from buyers who’ve been on the sidelines”, contract failures are still a significant concern.
Aaron Smith, senior economist at Moody’s Analytics, said despite buyers “becoming more confident and are attracted to record-low mortgage rates”, the overall activity in the sector “still looks depressed by historical standards”.
Meanwhile, the Wall Street Journal writes that the NAR’s recent report might not be that accurate. Mark Zandi, chief economist with Moody’s analytics, said: “Their revised estimates are better, but I’m not convinced they are all that much better”.