More home buyers signed purchase contracts in October compared to September, pushing up a monthly index of pending home sales, according to the National Association of Realtors.
Pending sales of existing homes rose 10.4 percent month-to-month in October.
Default rates on Fannie Mae and Freddie Mac loans have been very low, NAR said, “much lower than the vintages of 2002 and 2003 before the housing boom.”
The Midwest saw the biggest month-to-month increase, 27.3 percent, to 81.7. Year-over-year, the region saw the second biggest drop: 24.8 percent. The index rose 19.6 percent from September in the Northeast, to 71.3. The region saw the largest year-over-year drop: 27.3 percent. The South experienced a 7.1 percent month-to-month index jump. Year-over-year, the index fell 18.4 percent in the region.
In its latest economic outlook, NAR upwardly adjusted the forecast for an expected drop in existing-home sales in 2010 to 6.4 percent. The association expects sales to rise 6.2 percent in 2011 and 2.7 percent in 2012. The 2012 projection fell from 4.7 percent in last month’s outlook.
The association revised its latest projections for median existing-home prices slightly downward. NAR forecasts a median $172,500 for 2010 (flat from 2009) with hardly an increase in 2011: $173,500. The forecast for 2012 is better, but not by much: $177,700.
NAR expects the median price for new homes to be $220,100 this year, rising to $223,000 in 2011 and $230,700 in 2012.
