WASHINGTON (12/1/15)--Pending-home sales rose for the first time since the summer in October, with the National Association of Realtors’ monthly index inching higher by 0.2% to 107.7.
While sales have slowed in recent months, the long-term trend remains in positive territory, as the index came in higher by 3.9% on a year-over-year basis (Economy.com Nov. 30). Moody’s analysts call the index a leading indicator of the housing market.
“The pace of recovery in pending-home sales has been touch and go over the past several years, but the national pending-home sales index is still up significantly from its nadir in mid-2010,” said Brent Campbell, Moody’s analyst (Economy.com). “Demand from trade-up and trade-down homebuyers has been a key driver of pending-home sales, as many first-time homebuyers are still waiting on the sidelines.”
By region, sales climbed 4.5% in the Northeast and 1.7% in the West. Meanwhile, sales fell 1% in the Midwest and 1.7% in the South.
Only the South failed to post year-over-year increases in pending-home sales in October with a 0.3% decline. The West recorded the highest year-over-year gain at 10.4%, followed by the Northeast at 6.8% and the Midwest at 3.3%.
“An increasingly tight job market combined with accelerating wage growth will give potential first-time homebuyers the confidence they need to purchase homes,” Campbell said. “In addition, credit standards will finally starts to ease from their stringent levels experienced over the past several years as banks seek to expand their lending volumes.”