National Association of Realtors Release Pending Sales Report

Pending home sales calmed a bit after continued government efforts to revitalize the markets across the country.  The National Association of Realtors (NAR) released their Pending Home Sales Index, a market indicator that measures the recent activity and amount of contracts signed last December.  The data shows a modest 1% increase from November to 96.6% and an overall improvement of about 10% from December 2008.  In the Midwest, the index increased 5.2% to 86.9 and is 8.7% above a year ago. Pending home sales in the South rose 2.2% to an index of 98.4, and are 5.5% higher than December 2008.

According to the NAR’s chief economist Lawrence Yun, the continued rise sales activity will help firming home prices and the overall improvement of the housing market as compared to the year previous.  Yun predicts the federeal tax credit will encourage 2.4 million households to take the credit in 2010.

The positive outlook in residential real estate market is largely attributed to the implementation and extension of the federal $8000 tax credit for first time buyers and other qualified home owners.  Buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30, 2010, to finalize the transaction to qualify for a tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.

The resilience of the housing market will be tested when the current tax incentives expire this spring.  Should home sales continue coupled with a turn around in the job market, 2010 could be a year of recovery and building towards 2011.