In a release put out today Wednesday, October 8, 2008, the National Association of Realtors, said that pending home sales rose 7.4% in the July to August period. The organization’s seasonally adjusted index of pending sales for existing homes rose to 93.4. This was an increase from the upwardly revised July reading of 87. The 93.4 reading was the highest the index has been since June of ‘07. Forecasters had been looking for the index to fall to 84.9.

According to The National Association of Realtors chief economist Lawrence Yun, “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. “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.”

The Pending Home Sales Index in the West surged 18.4 percent to 109.5 in August and remains 37.8 percent above a year ago. In the Northeast the index jumped 8.4 percent to 79.8 and is 2.0 percent higher than August 2007. The index in the Midwest rose 3.6 percent to 84.5 in August and is 6.6 percent above a year ago. In the South, the index increased 2.3 percent to 96.0 but is 2.1 percent below August 2007.

The number was a very positive one that other wise would have bode very well for both the real estate and the stock markets. However, we know the economy is worsening, the unemployment rate which has already risen to 6.1% from 5.4% of late, will continue to rise and furthermore, getting a mortgage is becoming more and more difficult even for those with perfect credit, so we would have to see home sales continue to rise over a protracted period, before we can fully determine whether the real estate market has turned around.

Tags: Pending Home Sales