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US Sep Pending Home Sales Index Rises; 1st Increase Since Jun

   By Jeff Bater 
   Of DOW JONES NEWSWIRES 
 

WASHINGTON (Dow Jones)--A forward-looking indicator of home sales in the U.S. inched higher during September, a glimmer of good news for the ailing housing sector.

The National Association of Realtors' index for pending sales of previously owned homes increased at a seasonally adjusted annual rate of 0.2% to 85.7 in September from August's 85.5, the industry group said.

The increase was the first since June. NAR senior economist Lawrence Yun said the housing market will improve from demand and an abundance of safer mortgage products.

"The level of pent-up demand reaching the market next year is a bit uncertain, and it is possible for even higher home sales activity than we're forecasting if buyers regain their confidence about the long-term benefits of homeownership," he said, adding, "Over the near term, home sales are likely to be fairly flat as the lingering impact of the credit crunch filters through the system through the end of the year."

The NAR index, based on signed contracts for previously owned homes, was 20.4% below the level of September 2006.

"Even with relatively low fourth-quarter sales, 2007 will be the fifth-highest year on record for existing-home sales," Yun said. "The median existing-home price in 2007 will have fallen by less than 2% from an all-time high set in 2006."

Existing-home sales are projected at 5.67 million this year and 5.69 million in 2008. That compares with 6.48 million in 2006, the third-highest year on record.

Existing-home prices are expected to decline 1.7% to a median of $218,200 for all of 2007 and hold essentially even in 2008 at $218,300, the NAR said.

The NAR's pending home sales index was designed to try to measure the housing market's future direction. It is based on pending sales of existing homes, including single-family homes and condominiums. A home sale is pending when the contract has been signed but the transaction hasn't closed. Pending sales typically close within one or two months of signing.

By region, the Northeast decreased 10.1% in September from August; it fell 23.1% since September 2006. The Midwest rose 5.4% in September from August; it fell 14.4% since September 2006. The South increased 1.5% in September from August; it dropped 19.7% since September 2006. The West dipped 0.1% in September from August; it plunged 25.6% since September 2006.

 
   -By Jeff Bater, Dow Jones Newswires; 202-862-9249; jeff.bater@dowjones.com 
 

(END) Dow Jones Newswires

November 13, 2007 15:00 ET (20:00 GMT)


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