Pending Home Sales Index Falls to 88.9 in Oct.: NAR

Pending home sales decreased to a reading of 88.9 in October from an upwardly revised 89.5 in September, originally reported as 89.2, according to an index released yesterday by the National Association of Realtors.

Thomson Reuters’ poll of economists had predicted a 86.5 reading.

Year-over-year, the pending homes sales index was off 1.0% in October.

Regionally, pending sales were mixed. The West saw an 8.7% decrease, while sales slipped 4.3% in the Midwest. In the Northeast, pending sales rose 0.6%, and in the South sales increased 7.8%.

“Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range,” said NAR chief economist Lawrence Yun. “We did see a spike in August when mortgage conditions temporarily improved, which underscores two things — there is a pent-up demand, and access to safe, affordable mortgages will bring more buyers into the market.”

Yun expects growth in the U.S. gross domestic product to contract through the first half of 2009, then stabilize and expand in latter part of the year — lifted by a home sales recovery. “Given the critical role of housing in an economic recovery, we’re confident sufficient stimulus will be offered to bring more buyers to the market,” he said.

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