By Sunny Isles Real Estate Expert on December 1st, 2011
WASHINGTON – Nov. 30, 2011 – Pending home sales in Miami
rose strongly in October and remain above year-ago levels, according to the National Association of Realtors® (NAR).
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, surged 10.4% to 93.3 in October 2011 from 84.5 in September 2011 and is 9.2% above October 2010 when it stood at 85.5. The data reflects contracts but not closings.
“Miami home sales have been plodding along at a sub-par level while interest rates are hovering at record lows, and there is a pent-up demand from buyers who normally would have entered the market in recent years,” says Lawrence Yun, NAR chief economist. “We hope this indicates more buyers are taking advantage of the excellent affordability conditions. Many consumers recognize that homebuyers in the past two years have had one of the lowest default rates in history. Moreover, continued inventory declines are another healthy sign for the housing market.”
The PHSI in the Northeast surged 17.7% to 71.3% in October and is 3.4% above October 2010. In the Midwest the index jumped 24.1% to 88.7 in October and remains 13.2% above a year ago. Pending home sales in the South rose 8.6% in October to an index of 99.5 and are 9.7% higher than October 2010. In the West, the index slipped 0.3% to 105.5 in October but is 8.1% above a year ago.
“Although contract signings are up, not all contracts lead to closings,” Yun says. “Many potential homebuyers inadvertently hurt their credit scores and chances of getting a mortgage through easily averted actions, such as cancelling an old credit line while taking on a new one. Such actions could unwittingly prevent buyers from obtaining a mortgage if their credit score is close the margins of qualifying – or they might get a loan but with less favorable terms.”