Posted on Friday, December 3, 2010
WASHINGTON (AP) — The number of people who signed contracts to buy homes rose in October, the third gain since contract signings hit a decade low.
The National Association of Realtors said Thursday that its index of sales agreements for previously occupied homes rose 10.4 percent in October. Contract signings were up in every region of the country except the West.
Economists had expected contract signings to decline.
With the October gain, contract signings are 18.3 percent above June’s index, which was at the lowest level since the private group began tracking signed contracts in 2001. Still, they remain 20.5 percent below the October 2009 level, the highest point since May 2006, before the housing market collapsed.
A year ago, potential buyers were rushing to close deals to take advantage of a federal home-buying tax credit that initially was to expire in November.
Lawrence Yun, the Realtors’ chief economist, said that even with the rebound in contract signings in October, housing was being held back by a number of factors from high unemployment to tighter standards on home mortgages.
“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,” Mr. Yun said.
In a separate report, a foreclosure listing firm said that the worst summer for home sales in decades had dampened foreclosure sales.
RealtyTrac said foreclosure sales had dropped 25 percent in the July-September quarter versus activity in the April-June period, even as the average discount on distressed properties had increased.
The report on contract signings from the Realtors showed that signings were up 19.6 percent in the Northeast, 27.3 percent in the Midwest and 7.1 percent in the South. However, signings dropped 0.4 percent in the West region in October.
In a job-related report, the Labor Department said new claims for unemployment aid rose last week by a seasonally adjusted 26,000, to 436,000. The previous week’s claims were revised up slightly to show applications had tumbled by 31,000, to 410,000. The figures are often volatile during the weeks around the Veterans Day and Thanksgiving holidays.
Even so, the longer-term trend has shown a downward drift.
The four-week moving average of claims, which smoothes volatility, fell to 431,000 last week, a two-year low.
Thursday’s report also showed that the number of people continuing to collect unemployment aid rose to 4.3 million for the week ending Nov. 20.
By THE ASSOCIATED PRESS