Pending Sales Contracts Increase Dramatically in October

October was a great month in pending sales! 
Here is an interesting tidbit I found originally on MONEY.com. I paraphrased it here as I think it’s worth revisiting before the turning of the new year.
According to the National Association of Realtors, the number of pending home sales index surged in October setting a record for nine straight months of increases (up 3.7% from September).    The index gained a remarkable 31.8% from a year ago, which is actually the biggest year-over-year gain in the index’ history.  

The 1^st time homebuyer’s tax credit, lower interest rates and decreased home prices greatly contributed to the impressive gain of the number of sales contracts.  The index is based on signed contracts, not closed sales but this is still a strong indicator of the housing market’s performance and its short term future.  This can also be attributed to the number of homebuyers that rushed to beat the December 1^st deadline.  There is always a possibility the index will decline in the next few months or so due to the period between finding a home, negotiating and getting it under contract. However the number of pending sales contracts is expected to soar once again before the next deadline.  The expanded tax credit now available for both 1^st time homebuyers and some qualified, existing homeowners will expire on May 1^st, 2010. 

The boost in the number of pending sales also caused the decline in the home inventory with the rate of supply now at seven months which is down from a little over ten months a year ago.  This will likely cause the home prices to firm up and would broadly stabilize the home values and net worth of millions of US homeowners.   Looking forward to a brighter year ahead!