Pending home sales soared more than 10% in October and remain above year-ago levels, in a hopeful sign for the nation's housing market, according to the National Association of Realtors.
NAR's pending home sales index, a forward-looking indicator based on contract signings, surged 10.4% to 93.3 in October from 84.5 in September. The index is 9.2% above October 2010 when it stood at 85.5.
The index is based on signed real estate contracts for existing single-family homes, condos and co-ops. An index of 100 is equal to the average level of contract activity during 2001, the first of five consecutive record years for existing-home sales and coincides with a level that is historically healthy.
"Home sales have been plodding along at a subpar level while interest rates are hovering at record lows and there is a pent-up demand from buyers who normally would have entered the market in recent years," said Lawrence Yun, NAR chief economist.
The PHSI in the Northeast rose 17.7% to 71.3 in October, 3.4% above October 2010. In the Midwest, the index jumped 24.1% to 88.7 in October and remains 13.2% above a year ago.
The South saw a smaller gain, 8.6% in October, to an index of 99.5 — 9.7% higher than October 2010.
Only the West saw slippage, but remains above 100. There, the index slipped 0.3% to 105.5 in October but is 8.1% above a year ago.
The index is based on a national sample, typically representing about 20% of transactions for existing-home sales.
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