Pending sales of existing homes were up 5.2 percent from September to October and 13.2 percent from a year ago, according to an index maintained by the National Association of Realtors.
NAR’s Pending Home Sales Index, which represents existing-home contracts signed but not yet closed, rose to 104.8 in October — the highest sustained level in five years. In April 2010, when the federal homebuyer tax credit was still in place, the index hit 111.3, but soon dipped back down.
An index score of 100 is equal to the average level of sales-contract activity in 2001, a year in which home sales were within a range that’s considered "normal" for the current U.S. population. Contracts signed in October typically close one or two months later.
The 13.2 percent year-over-year jump for the index in October marks the 18th consecutive month of annual increases — a sign of sustained growth.
"We’ve had very good housing affordability conditions for quite some time, but we’re seeing more impact now from steady job creation, and rising consumer confidence about home buying now that home prices have clearly turned positive," said NAR Chief Economist Lawrence Yun in a statement.
All regions saw double-digit annual gains in October but the West, where Yun said limited inventory "is keeping a lid on the market." In the West, the pending home sales index dipped 1.1 percent from September to October, but were still up 0.9 percent from a year ago.
Yun said the Northeast saw some impacts from Hurricane Sandy, which disrupted the normal routines of millions of residents before making landfall in Atlantic City, N.J. on Oct. 29. The index showed pending home sales in the Northeast falling 0.1 percent from September to October, but up 13.3 percent from a year ago.
The index in the Midwest rose 15.6 percent from September to October and 20.0 percent from a year ago.
In the South, pending home sales rose 5.5 percent for the month and 17.4 percent from a year ago.
NAR’s latest economic outlook, also out today, projects that 2012 existing-home sales will total 4.64 million, which would represent an 8.9 percent increase from 2011. NAR is forecasting 9 percent growth in existing-home sales for 2013, to 5.06 million.
The trade group also anticipates sales of new homes will rise 23.3 percent for 2012, to 371,000, and a whopping 52 percent in 2013, to 564,000.
NAR expects home prices to be up for this year and next. After falling 3.9 percent in 2011, the trade group expects a 6.6 percent increase in the median price of existing-home sales in 2012, to $177,000, and a 4.3 percent increase in 2013, to $184,600.
NAR economists anticipate a 5.4 percent increase in the median price of new homes this year, to $238,100, and a 6.1 percent increase next year, to $252,600.
NAR is projecting that interest rates for 30-year fixed rate mortgages will average 4.1 percent next year, up from 3.7 percent in 2012.
NAR expects this year’s national real gross domestic product to grow 2.1 percent, followed by 2.3 percent growth in 2013. The U.S. unemployment rate is expected to average 8.1 percent this year and drop to 7.8 percent in 2013.