(Bloomberg) -- Contracts to purchase previously owned U.S. homes increased marginally in October as a strong labor market and growing wages continue to support demand, according to figures released Wednesday from the National Association of Realtors in Washington.
Key Points
- Pending home sales gauge rose 0.1 percent (matching the median forecast) after rising 1.4 percent the prior month
- Index increased 0.2 percent from October 2015 on an unadjusted basis
- Pending sales climbed in three of four U.S. regions on a month-to-month basis
Big Picture
The figures show the housing market was making measured progress in the month leading up to a jump in borrowing costs. Demand has been supported by solid job growth and rising wages. A sustained pickup in mortgage rates after a spike earlier this month, along with a limited number of available properties, are potential headwinds to further progress.
Economist Takeaways
“Despite limited listings and steadfast price growth that's now carried into the fall, buyer demand has remained strong because of the consistently reliable job creation in a majority of metro areas,” Lawrence Yun, NAR's chief economist, said in a statement. “Those obtaining a mortgage last month were likely the last group of buyers to lock in a rate near historically low levels now that rates have marched to around 4 percent since the election.”
Other Details
- Purchases increased 1.6 percent in the Midwest, 0.7 percent in the West and 0.4 percent in the Northeast; contract signings dropped 1.3 percent in the South, the largest region
- The seasonally adjusted pending-sales gauge inched up in October to a three-month high of 110.0
- NAR economist Yun projects 5.36 million home sales this year, up from 5.25 million in 2015 and the strongest in a decade
- Some 40 percent of properties sold in October were at or above the listed price
To contact the reporter on this story: Patricia Laya in Washington at playa2@bloomberg.net. To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Vince Golle
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