- Posted January 02, 2012
- Tweet This | Share on Facebook
Contract signings for U.S. homes up in November
By Derek Kravitz
AP Real Estate Writer
WASHINGTON (AP) -- The number of Americans who signed contracts to buy homes in November rose to the highest level in a year and a half.
The best reading on pending homes sales since a federal home-buying tax credit expired appeared to encourage traders on Wall Street.
Still, the National Association of Realtors cautioned that a growing number of buyers are canceling their contracts at the last minute, making the gauge less reliable.
The Realtors group said last Thursday that its index of sales agreements jumped 7.3 percent last month to a reading of 100.1.
A reading of 100 is considered healthy. The last time the index was that high was in April 2010, one month before the tax credit expired.
Stocks rose after the index was released. The Dow Jones industrial average gained more than 70 points in morning trading, and broader indexes also increased.
Contract signings usually indicate where the housing market is headed. There's a one- to two-month lag between a signed contract and a completed deal.
But a sale isn't final until a mortgage is closed and many are falling apart before that happens. One third of Realtors say they've had at least one contract scuttled in November and October, according to the Realtors' group. That's up from 18 percent in September.
Pierre Ellis, an analyst at Decision Economics, said potential buyers are "feeling comfortable with their personal situations and with the house-price trend." But the demand for homes is running into significant obstacles, he said, including tougher lending standards and bigger required down payments.
Homes are the most affordable they've been in decades. Long-term mortgage rates are at historic lows and prices in most metro areas have tumbled since late 2006.
Yet this year will likely be the worst year for new-home sales in history. Sales of previously occupied homes are just barely ahead of 2008's dismal figures -- the worst yearly showing since 1997.
Americans are holding off buying a home for a number of reasons. High unemployment and weak job growth have deterred many potential buyers. Loans are harder to come by. Lenders are requiring bigger down payments and strong credit scores to qualify.
Even those with good credit and stable finances are hesitant to buy out of concern home prices will keep falling.
Published: Mon, Jan 2, 2012
headlines Oakland County
- Associations gather for Spring Fling
- Law school’s team wins William and Mary Colonial Cup Competition
- Supreme Court makes it easier to sue for job discrimination over forced transfers
- Oakland County Physician bound over on insurance fraud charges
- Innocence Project leaders present at University of Pennsylvania Carey Law School Spring Symposium
headlines National
- Incarceration series includes female inmates but doesn’t tell full story
- ACLU and BigLaw firm use ‘Orange is the New Black’ in hashtag effort to promote NY jail reform
- Former DOJ official who alleged election fraud violated at least one ethics rule, ethics committee says
- Winston & Strawn will provide reduced-cost legal services for routine tasks under Winston Legal Solutions umbrella
- Should Justice Sotomayor retire? Chemerinsky, White House haven’t joined calls for her to step down
- Which BigLaw firms are increasing lateral associate hiring the most? One made legal headlines last year