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Pending Sales of Existing Homes in U.S. Rose in July

Monday, January 29, 2018   /   by Sean Zanganeh

Pending Sales of Existing Homes in U.S. Rose in July

Who Says Homes ain't selling?!?!

This summer has be Hot HOT HOT!!!!

We clearly see that sales are up and inventory is shrinking. Check out this article on the national level from Bloomberg News

Sept. 1 (Bloomberg) -- The number of contracts to buy previously owned homes rose more than forecast in July and increased for a record sixth consecutive month, reinforcing signs that the housing market is steadying.

The index of signed purchase agreements, or pending home sales, gained 3.2 percent after a 3.6 percent rise in June, the National Association of Realtors said today in Washington. The index level of 97.6 was the highest since June 2007. Compared with July 2008, pending sales climbed 13 percent.

Foreclosure-driven declines in prices, low borrowing costs and tax credits for first-time buyers are lifting demand, helping to trim the property glut weighing on the economy. A jobless rate that is forecast to rise into 2010 and restrictions on lending may limit the rebound in housing and in economic growth.

“The housing market is much improved,” said Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania, in a Bloomberg Television interview.

Pending sales were projected to rise 1.5 percent after an originally reported gain of 3.6 percent in June, according to the median forecast of 35 economists in a Bloomberg News survey. Estimates ranged from a drop of 1 percent to an increase of 5 percent.

Manufacturing Rebounds

Another private report today showed factories in the U.S. expanded in August for the first time in 19 months, helping lead the economy out of the worst recession since the 1930s. The Institute for Supply Management’s factory gauge increased to 52.9, exceeding forecasts and the highest level since June 2007, the Tempe, Arizona-based group said today. Fifty is the dividing line between expansion and contraction.

Pending home sales are considered a leading indicator because they track contract signings. The Realtors’ existing- home sales report tallies closings, which typically occur a month or two later. The Realtors group’s pending sales data go back to January 2001, and it started publishing the index in March 2005.

Two of four regions saw an increase, today’s report showed. In the West, pending sales jumped 12 percent from the previous month, and in the South they rose 3.1 percent. The Midwest had a 2 percent decline, and the Northeast recorded a 3 percent drop.

Foreclosures remain a risk. Americans fell behind on mortgage payments at a record pace last quarter, the Mortgage Bankers Association reported Aug. 20. The inventory of homes in foreclosure rose to the most in three decades of data, it said.

Job Losses

An unemployment rate that’s forecast to reach 10 percent by early 2010, according to a Bloomberg survey, also may limit sales.

The housing market is beginning to stabilize, according to figures released last month. Combined sales of new and existing homes rose in July at a 5.673 million annual rate, the highest level since November 2007, the month before the recession started.

Policy measures to boost demand range from an $8,000 tax credit for first-time buyers to the Federal Reserve keeping its benchmark interest rate near zero and central bank purchases of mortgage-backed securities to free up funding for housing loans.

Prices also are stabilizing. The S&P/Case-Shiller national home-price index rose 2.9 percent in the second quarter from the prior three months, the first increase since 2006 and the biggest in almost four years.

Toll Brothers Inc., the largest U.S. builder of luxury homes, raised prices at about 40 percent of its developments and the rest are seeing “price stability,” Chief Executive Officer Robert Toll said. The Horsham, Pennsylvania-based company still posted a wider loss for the quarter ended July 31.

“We are fairly well convinced that the bottom has been turned and therefore we are not increasing incentives or lowering prices anywhere,” Toll said on a conference call with investors and analysts on Aug. 27.

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Sean Zanganeh
Windermere Exclusive Properties
Real Estate Consultant & Notary Public

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