The National Association of Realtors developed the pending home sales index as a leading indicator of housing activity. As such, it is a leading indicator of existing home sales, not new home sales. A pending sale is one in which a contract was signed, but not yet closed. It usually takes four to six weeks to close a contracted sale. Why Investors Care
| Released on 10/8/08 For Aug 2008 | |||||||||||||||
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Highlights
In rare good news for the housing sector -- that couldn't come at a better time -- pending home sales surged 7.4 percent in August for a year-on-year gain of 8.8 percent. The West, which has been hurt the most, bounced back strongly, up 18.4 percent for a year-on-year gain of 38 percent. The results are a surprise given the credit squeeze but, as evidenced by this morning's mortgage bankers data, loan rates are coming down and are evidently attracting credit-worthy buyers.
If pending sales are followed by gains in final sales, we could be seeing the bottoming for the sector whose weakness of course is at the center of the global credit squeeze. But improvement is tentative and in fact uncertain, underscored in a special warning by the National Association of Realtors that ongoing troubles in the credit market could disrupt final closings. Next housing data isn't until next week with Thursday's housing market index from the nation's homebuilders. Markets, focused on today's coordinated global rate cuts, showed no immediate reaction to the report.
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