Pending Home Sales Dropped 16 Percent after Rising for Nine Straight Months

According to the National Association of Realtor’s (NAR) Pending Home Sales Index (PHI), there was a drop of 16%, after rising for nine consecutive months.

The NAR index is based on pending contracts of existing home sales, including single-family homes and condominiums. A home sale is considered pending when the contract has been signed but the transaction hasn’t closed. A contract typically closes within two months of signing.

Pending Home Sales Index for November 2009

• The Northeast index fell 25.7% in November, but was 14.7% higher than November of 2008.
• The Midwest index fell 25.7%, but was 9.2% higher than November of 2008.
• The index in the South fell 15.0%, but was 14.7% higher than November of 2008.
• The index in the West fell 2.7%, but was 21.4% higher than November of 2008.

First-time Home Buyers Tax Credit Surge 

There was a surge of activity in prior months as first-time home buyers were scurrying to beat the tax credit deadline. Even with the decline, pending home sales were still 15.5% higher than November of 2008.

To qualify for up to $8000 dollars in tax credit, first-time home buyers must be purchasing a primary residence, have a contract in place by April 30, 2010 and close by June 30, 2010.

According to Lawrence Yen, NAR chief economist, “The fact that pending home sales are comfortably above year-ago levels show the market has gained sufficient momentum on its own. “It will be at least early spring before we see notable gains in sales activity as home buyers respond to the recently extended and expanded tax credit,” says Yen.

Existing-home sales for December will be reported January 25 and the next Pending Home Sales Index will be on February 2, 2010; 10:00 EST.

Charlotte, NC Real Estate Expert 

Leigh Brown is the leading real estate agent of the Charlotte, NC  Metro Area. Over the years, Leigh has helped many clients buy and sell property in Charlotte, NC with a proven track record of success. If you are in the market to buy property in Charlotte, NC or sell your existing home, you need Leigh Brown on your team!

You can reach Leigh by filling out her online contact form or by calling her at (704) 688-5005 or toll free at (866) 440-7136.

Sources:
National Association of Realtors
Market Watch
NY Times