October pending homes sales rose for the ninth straight month and hit their highest levels since March 2006, just about when the housing bubble was at its peak.
According to data released moments ago by the National Association of Realtors, October pending home sales were up 3.7 percent in October, compared to September, and up 32 percent versus October 2008–the biggest annual increase in history. Remember, though, October 2008 was a historic trough, so a year later, there was nowhere to go but up.
Pending home sales — this number of contracts signed, not actual closings — rose in all sections of the country except the West. They were up 20 percent in the Northeast, 11.6 percent in the Midwest and 5.4 percent in the South, but down 11.2 percent in the West, which is not surprising, because that’s where the most overbuilt states — California, Arizona, Nevada — are.
Part of the surge is probably attributable to buyers rushing to take advantage of the government-subsidized first-time home buyer’s credit, which was set to expire at the end of November but now has been extended through April. Also, the bulk of sales still are coming from cheaper houses, with little movement in houses costing more than $250,000.
In other key data out moments ago, the Institute for Supply Management said its November index of U.S. manufacturing came in at 53.6, down from the October number of 55.7, indicating a slowdown of manufacturing.
Also, construction spending in October was largely unchanged compared to September. The weakness came from the commercial side, balancing out a 4.4 percent gain in residential construction.
In response, stocks have pulled back just a bit from their roaring opening, but remain strongly up on the day.
By Frank Ahrens | December 1, 2009; 9:54 AM ET
The Washington Post