Recent news coming out suggests the economic recovery is still in place but there have been a few bumps along the way. But today’s release of a closely-watched gauge of future existing home sales indicates the recovery in housing appears to be picking up steam.
The Pending Home Sales Index jumped 6.4% in August to 103.8, its seventh-consecutive monthly increase and the best reading since March 2007. The forward-looking survey now stands 12.4% above a year ago.
However, Lawrence Yun, the chief economist for the National Association of Realtors, tried to downplay today’s upbeat number, noting that not all contracts are turning into closed sales within an expected timeframe.
“The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules,” he said. “No doubt many first-time buyers are rushing to beat the deadline for the $8,000 tax credit, which expires at the end of next month.”
The question that continues to loom large is whether Congress will extend the tax credit for buyers, which has been proven to be one of the few effective measures in the stimulus bill passed earlier in the year by Congress.
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