Housing Market Picks Up

housing marketAnother sign that the housing market is recovering came on November 29th when the National Association of Realtors reported an increase in pending home sales to 5.2% in October.

The improvement is reflected in the pending-home-sales index which reached 104.8 last month from 99.6 in September. On the index, 100 is equivalent to the 2001 average level of contract activity. This means the market is picking up beyond pre-recession levels in this sector as more people are buying previously owned homes. Despite the setback of Hurricane Sandy, which has slowed real estate markets in the Northeast, growth in the Midwest and in the South have more than made up for their neighbor’s regional decline.

This represents a 13.2% increase from this time last year, and continues the 18 month of gains for the real estate sector. This is an impressive rise, particularly considering the past uncertainty during election season and now before the fiscal cliff for buyers.  Furthermore, the Mortgage Bankers’ Association reported that last week applications for mortgage loans to buy homes increased 11% since November 9th, contributing to the 22% increase in purchasing applications this year.

Not only are the sales contracts and purchasing applications up from previous months and rising, but construction sector confidence in the housing market is also growing strongly. On the builder sentiment index the US now hits 46 in November, rising 5 points from 41 in October. A year ago, the index showed  confidence level of 17, with 50 and above marking positive sentiment regarding the market.

Positivity is certainly growing for many Americans, affirms NAR’s Chief Economist Lawrence Yun, “We’ve had very good housing affordability conditions for quite some time, but we’re seeing more impact now from steady job creation, and rising consumer confidence about home buying now that home prices have clearly turned positive.”

Posted by: Sophia Higgins

Sources: Reuters, Market Watch by the Wall Street Journal, Time Business

Photo Credit: Real Estate = Big Money courtesy of Flickr user thinkpanama

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