Pending home sales nudged upward in October

WASHINGTON – The number of Americans who signed contracts to purchase homes edged up slightly in October, a sign that the housing market remains on sure footing after solid price and sales gains this year.

The National Association of Realtors said Wednesday that its seasonally adjusted pending home sales index rose 0.1 per cent to 110. Pending sales improved in the Northeast, Midwest and West, while falling in the South.

Many of the contracts were signed when 30-year mortgage rates were averaging less than 3.5 per cent, close to a historic low. In the weeks since the presidential election, average rates have jumped above 4 per cent, making it costlier to buy a home.

The Mortgage Bankers Association reported Wednesday that applications for both new home loans and refinanced loans dropped over the past week.

Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed.

Over the past 12 months, sales of existing homes have climbed 5.9 per cent to an annual rate of 5.6 million.

The increased demand has done little to bring more sellers into the market. Sales listings have fallen 4.3 per cent over the past year to 2.02 million homes. The shortage has pushed up the median sales price of existing homes 6 per cent from a year ago to $232,200.