The pending number of U.S. home buyers who signed contracts to purchase previously occupied houses jumped in October to the highest level of this year amid signs of gradual economic improvement.
The National Association of Realtors’ seasonally adjusted index for pending sales of existing homes increased 10.4% on a monthly basis to 93.3, the highest reading since November 2010, the industry group said Wednesday.
The results were 9.2% above October 2010 and were better than expected.
“We hope this indicates more buyers are taking advantage of the excellent affordability conditions,” said Lawrence Yun, the trade group’s chief economist.
The index tracks agreements to purchase houses. A sale is considered pending when the contract has been signed but the transaction hasn’t closed. These purchases typically close within one or two months of signing.
Purchases of both new and existing houses have been running higher than a year earlier. But uncertainty over the direction of prices, high unemployment, and the difficulty of getting home loans are preventing the housing market from gaining much ground.
The overall economy, however, improved over the summer, picking up some speed after slowing sharply early in the year.
These purchases rose in three out of four U.S. regions. The biggest increase of 24.1% was in the Midwest. They rose 17.7% in the Northeast and 8.6% in the South and fell 0.3% in the West.
The housing market, however, remains shaky. Prices declined by 0.6% in September from a month earlier, according to the widely followed Standard & Poor’s/Case-Shiller index of 20 major metropolitan areas. For the third quarter, prices were down 3.9% nationwide, compared with a year earlier, according to Case-Shiller.
Prices remain under pressure because the housing market continues to digest high volumes of foreclosed and other “distressed” properties that tend to sell at a discount. Though sales picked up at the end of the summer, analysts said buyers were only closing deals they perceive as a bargain, which could help explain why prices are sliding again.