NEW YORK - Pending home sales inched up 1.0% to a reading of 96.6 in December from a revised 16.4% decline to 95.6 in November, originally reported as a 16.0% drop to 96.0, according to an index released today by the National Association of Realtors.
Thomson Reuters’ poll of economists had predicted a 97.1 reading.
Year-over-year the pending homes sales index was up 10.9% from last December, when the index was 87.1.
Regionally, pending sales were mostly higher. The Northeast saw a 2.3% increase to 76.1, while sales grew 5.2% to 86.9 in the Midwest. In the South sales gained 2.2% to 98.4, while in the West, pending sales dropped 3.8% to 119.9.
“There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded,” NAR Chief Economist Lawrence Yun said. “These swings are masking the underlying trend, which is a broad improvement over year-ago levels. December activity was the fifth highest monthly tally in two years,” he said.
The extended and expanded tax credit should be utilized by 2.4 million households in 2010, he forecast. “While new-home sales will remain low due to a lack of construction, existing-home sales are projected to rise to around 5.6 million in 2010,” Yun said, compared to 5.16 million existing-home sales last year.
And an increase in sales will shore up prices. “For several months now we’ve been seeing stabilization in all of the home price measures as inventory is pulled down,” Yun said. “As a result, the housing wealth for many middle class families has begun to stabilize.”
