Dutch castle for sale. Image by Photocapy/Flickr.
Pending home sales, instead of dropping 1% in October as estimated, rose 10%. The gains happened amidst rock-bottom mortgage rates of 4.3% and late September’s foreclosure moratorium. Bloomberg has more:
Three of four regions saw an increase, today’s report showed. That included gains of 27 percent in the Midwest, 20 percent in the Northeast and 7.1 percent in the South. Purchases fell 0.4 percent in the West.
Low borrowing costs and reduced prices may attract some buyers, helping housing regain its footing after the end of a tax credit caused demand to slump. Even so, rising foreclosures and unemployment near 10 percent indicate the industry at the center of the last recession will take years to rebound.
Compared with October 2009, pending sales were down 22 percent.
“Pending home sales are considered a leading indicator because they track contract signings,” according to Bloomberg. The real verdict on the real estate market will happen when–and if–all these contracts close. Banks still aren’t willing to lend money the way they used to; if closings do indeed increase proportionally to contract signing, then we’re getting somewhere.