Pending Sales of Existing Homes in U.S. Rose 6.1% in September
2009-11-02 15:00:00.4 GMT Bob Willis
Nov. 2 (Bloomberg) -- The number of contracts to buy previously owned homes in the U.S. rose in September for an eighth straight month as Americans rushed to meet a deadline for a home-buyer tax credit.
The index of signed purchase agreements, or pending home sales, rose 6.1 percent after a 6.4 percent gain in August, the National Association of Realtors announced in Washington.
Compared with a year earlier, pending sales rose 19.8 percent, without adjusting for seasonal variations.
Many buyers accelerated purchases of new homes to take advantage of the $8,000 tax credit before it expires Nov. 30.
Foreclosure-driven price declines and low mortgage rates have also pushed sales up this year. Home sales may cool in coming months unless the credit is extended under a deal worked out by Senate Democrats.
“Home sales continued to show improvement as we see people rush to take advantage of the homebuyer tax credit, although the sustainability of this move is in doubt, and we expect a far slower growth rate going forward,” David Semmens, an economist at Standard Chartered Bank in New York, said before the report.
Pending home sales were projected to be unchanged in September from the prior month, according to the median forecast of 33 economists in a Bloomberg News survey. Estimates ranged from a drop of 2.5 percent to an increase of 5.5 percent. The Realtors group has collected pending sales data since January 2001, and it started publishing the index in March 2005.
Leading Indicator
Pending home sales are considered a leading indicator because they track contract signings. The Realtors’ existing- home sales report tallies closings, which typically occur a month or two later.
Sales rose in three of four regions from the prior month.
They increased 10.2 percent in the West, 8.1 percent in the Midwest and 4.9 percent in the South. Sales fell 2 percent in the Northeast.
“As long as buyers do not overstretch and stay well within their budget, a sizeable pent up demand can be tapped among financially qualified potential buyers,” NAR Chief Economist Lawrence Yun said in a statement. Still, “We’re clearly not out of the woods because an excess of homes remains on the market.”
Sales of existing homes surged a record 9.4 percent in September to a 5.57 million annual rate, a report last month showed. The median price fell at the slowest pace in a year as the number of houses on the market shrank.
Federal Reserve
The Federal Reserve has announced it will phase out its purchases of $1.25 trillion in mortgage-backed securities by March, signaling borrowing costs for home buyers may rise after the average rate on a 30-year mortgage fell to a record 4.78 percent in April.
Housing-related companies are still recovering from the industry’s worst slump since the Great Depression. USG Corp., North America’s largest maker of gypsum wallboard, posted its eighth straight net loss last quarter as sales dropped 32 percent from the same time last year.
“We’re expecting we’ve hit the bottom in housing,” Chief Executive Officer William Foote said Oct. 21 on a conference call with analysts. He added it would take time for any sustained improvement to “really kick in.”
MORTGAGE RATES NEARLY UNCHANGED FROM FRIDAY
Most rate prices are near unchanged this morning as mortgage bonds start out losing ground, then improve, then fall back a bit after the release of better than expected data. Treasuries are taking a hit while stocks strengthen in yet another reversal. This back and forth movement is a telling sign of the reality of increased volatility as market participants debate the shape and form and timing of recovery, and the impacts of anticipated decreased Fed intervention. Busy news week culminating in the employment report on Friday. This week is likely to be choppy ahead of this heavily weighted data. Be careful and if you have your full documentation and package to your lender, you should lock ahead of any weighty news. Not sure? Contact your lender (or me) and get that package in, if you want to refinance at rates still near or below 5%. It's may be a roller coaster ride for rates, so being prepared to lock is better than trying to do so without your full loan document package in to your lender. Be prepared!
In the news today - Market Headlines for November 2, 2009
Trading on the market remains unchanged for mortgage backed securities, but that could change at midday repricing. Be prepared to lock against choppy news this week.
Data released today for:
Pending Home Sales Month over Month SEP 0.00% change
Pending Home Sales Year over Year
Construction Spending Month over Month - SEP -0.20% change
U.S. September Construction Spending Report
2009-11-02 15:00:01.740 GMT By Alex Tanzi
Nov. 2 (Bloomberg) -- The following is the text of the September construction spending report from the U.S. Commerce Department.
SEPTEMBER 2009 CONSTRUCTION AT $940.3 BILLION ANNUAL RATE
The U.S. Census Bureau of the Department of Commerce announced today that construction spending during September 2009 was estimated at a seasonally adjusted annual rate of $940.3 billion, 0.8 percent (1.8%)* above the revised August estimate of $933.0 billion. The September figure is 13.0 percent (1.9%) below the September 2008 estimate of $1,081.2 billion.
During the first 9 months of this year, construction spending amounted to $715.2 billion, 12.1 percent (1.3%) below the $813.3 billion for the same period in 2008.
PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $613.9 billion, 0.5 percent (1.1%)* above the revised August estimate of $610.9 billion. Residential construction was at a seasonally adjusted annual rate of $256.0 billion in September, 3.9 percent (1.3%) above the revised August estimate of $246.4 billion. Nonresidential construction was at a seasonally adjusted annual rate of $357.9 billion in September, 1.8 percent (1.1%) below the revised August estimate of $364.5 billion.
PUBLIC CONSTRUCTION
In September, the estimated seasonally adjusted annual rate of public construction spending was $326.4 billion, 1.3 percent (2.9%)* above the revised August estimate of $322.1 billion.
Educational construction was at a seasonally adjusted annual rate of $88.7 billion, 0.1 percent (3.4%)* below the revised August estimate of $88.8 billion. Highway construction was at a seasonally adjusted annual rate of $85.5 billion, 1.0 percent (7.8%)* above the revised August estimate of $84.6 billion.
Tomorrow news:
Factory Orders for Sep
ABC Consumer Confidence
Total Vehicle Sales
Domestic Vehicle Sales
Comments(0)