Pending Home Sales Surge in October

Washington, DC, Dec. 2, 2010 -- Pending home sales jumped in October, according to the National Association of Realtors.

The Pending Home Sales Index rose 10.4% to 89.3 based on contracts signed in October from 80.9 in September. The index remains 20.5% below  a cyclical peak of 112.4 in October 2009, which was the highest level since May 2006 when it hit 112.6.

Lawrence Yun, NAR chief economist, said excellent housing affordability conditions are drawing home buyers.

“It is welcoming to see a solid double-digit percentage gain, but activity needs to improve further to reach healthy, sustainable levels," Yun said.

"The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market and consequential boost to household formation will help the recovery process going into 2011.” 

He said that a return to more normal loan underwriting standards and removal of unnecessary underwriting fees for very low risk borrowers is needed and could quickly help in the housing and economic recovery.

Yun said he expects home sales will continue to climb from their cyclical low this summer.