Pending home sales throughout the nation jumped 7.4 percent in August, the largest increase since October 2001. In fact, pending home sales are showing a steady increase since March signaling that the housing recovery is in its early stages.
Lawrence Yun, NAR chief economist, said home buyers were responding to improved affordability. “What we’re seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island and the Washington, D.C., region,” he said.
A break down of the regions shows the West with the largest increase of 18.4 percent followed by the North East with an increase of 8.4 percent. In the Midwest pending home sales rose 3.6 percent with the South showing the smallest increase of 2.1 percent.
Pending home sales for the near future has become questionable as credit markets have begun to dry up. The latest $700 billion bailout by the government may be the cash injection needed to the credit markets that makes it possible for credit worthy homebuyers to obtain a mortgage for their new home purchase.
"It’s unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we’re hopeful most of the increase will translate into closed existing-home sales,” said Yun. “We need to see just how much of this gain holds up.”
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