The Home Buyer's Korner

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October 29th, 2014

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Pending Home Sales for September

Homes SalesHome buyers across the country signed fewer purchase agreements to buy existing homes in October, while the inventory of homes for sale increased.

The Pending Home Sales Index by the National Association of Realtors showed a fall of 1.1 percent, but revised its reading for September to 2.2 percent higher and still higher than the same time last year. It marks the second consecutive month of annual gains and a viable indicator of closed sales over the next 60 days.

The homes for sale inventory were five percent higher in October than it was a year ago, while historically the number of listings usually drops in the fall and winter month.  The likely increase is more home sellers and noticed the increases in home prices that began in last 2013 and continued well into 2014. Despite the recent drop in signed contracts home sales remain in balance for both buyers and sellers.

Low interest rates and an increase in inventory has also been enticing would-be home buyers this fall, while property flippers have been exiting many markets, only to pop up in other places like Miami, Tampa, Baltimore, RiversideSan Bernardino and Chicago.

Pending home sales increased only in the Northeast; up 0.5 percent month-to-month, while the rest of the country declined on a monthly basis.  Demand however is holding steady, but stagnant wages and as of now, continued tight credit conditions are hurting many would be home buyers who would greatly benefit by paying a mortgage versus paying rent.

Sales of existing homes rose in October to the highest level in a year, as home price gains ease after rapid appreciation in late 2013 and most of 2014. Average mortgage rates, as reported by Freddie Mac are near historic lows, but mortgage purchase applications fell last week, which could suggest weaker home sales in the near future.

The Commerce Department reported this week that sales of new single-family homes increased by 0.7 percent to a seasonally adjusted annual rate of 458,000 units. September’s sales pace was 455,000 units, while housing analyst expected new home sales to rise to an adjusted seasonal number of 472,000 units.  New home sales account for about 10 percent of the housing market and the index used is frequently adjusted, which makes it a less reliable report to measure short or long term growth.

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