Pending home sales rise for 9th month in a row

The pending home sales index rose a seasonally adjusted 3.7% in October from September, the National Association of Realtors (NAR) reported. The index is up 31.8% compared with last October. The index rose 6% in September.

Lawrence Yun, the chief economist for NAR, said the increase in pending home sales wasn’t entirely due to the tax credit.

“Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually,” he said.

NAR projects 2010 existing homes sales to rise 10.8% to 5.7 million compared with 5.15 million in 2009. New-home sales are forcasted to rise 42% in 2010 to 561,000 from 394,000 in 2009. Home prices are expected to rise about 4%, according to Yun’s forecast

NAR’s Yun on Foreclosures

First Time Home Buyers=the bulk of sales

From an NAR practitioner survey in March :

1st time home buyers accounted for 53 percent of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available. “Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” Yun said. “By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.”

NAR President Charles McMillan said first-time buyers are crucial at this stage of a housing recovery. “The housing market always heals from the bottom up, and with large numbers of first-time buyers entering the market it will become a little easier for sellers to trade up or down, according to their needs,” he said.

“Although homeownership builds wealth over the long term, buyers need to evaluate their options. In this market, buyers and sellers who use a REALTOR® to represent them are making a smart move,” McMillan said.