More homebuyers signed purchase contracts in October compared to September, pushing up a monthly index of pending home sales, according to a report from the National Association of Realtors.
Pending sales of existing homes rose 10.4 percent month-to-month in October, to 89.3. An index score of 100 is the average level of contract activity in 2001, the first year that index data was collected and a record year for existing-home sales.
“It is welcoming to see a solid double-digit percentage gain, but activity needs to improve further to reach healthy, sustainable levels. The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market and consequential boost to household formation will help the recovery process going into 2011,” said Lawrence Yun, NAR’s chief economist, in a statement.
On a year-over-year basis, the index is down 20.5 percent from October 2009 when the original deadline of the first-time homebuyer tax credit helped push the index up to its highest level since May 2006.
“A return to more normal loan underwriting standards and removal of unnecessary underwriting fees for very low-risk borrowers is needed,” Yun said.
Default rates on Fannie Mae and Freddie Mac loans have been very low, NAR said, “much lower than the vintages of 2002 and 2003 before the housing boom.”
We have seen a very active fall as well here in the Tahoe/Truckee real estate market. It is a great time to buy with depressed pricing and interest rates near historic lows. Contact me today for my free e-book “7 Reasons Why To Buy Now,” an informative look at the current state of the buyer’s market and why you should buy now.
Jamie Schou
Direct – 530-798-1393
jschou@kw.com