A report released by the National Association of Realtors on Tuesday showed another significant increase in pending home sales in the U.S. in the month of September.
NAR said its pending home sales surged up by 1.5 percent 108.7 in September after spiking by 1.4 percent to a revised 107.1 August.
Economists had expected pending home sales to climb by 0.9 percent compared to the 1.6 percent jump originally reported for the previous month.
With the bigger than expected monthly increase, pending home sales in September were up by 3.9 percent compared to the same month a year ago.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
NAR chief economist Lawrence Yun noted historically low mortgage rates played a significant role in the two straight months of gains.
“Even though home prices are rising faster than income, national buying power has increased by 6% because of better interest rates,” Yun said.
He added, “Furthermore, we’ve seen increased foot traffic as more buyers are evidently eager searching to become homeowners.”
The bigger than expected jump in pending home sales reflected sharp increases in the Midwest and South, where pending sales soared by 3.1 percent and 2.6 percent, respectively.
On the other hand, pending home sales slumped by 1.3 percent in the West and edged down by 0.4 percent in the Northeast.
The material has been provided by InstaForex Company – www.instaforex.com