The National Association of Realtors® (NAR) said Thursday the volume of ‘contracts pending’ rose 6.4 percent from July to 103.8, beating forecasts. Economists surveyed by Thomson Reuters expected the index would rise just 98.6. The index is at the highest level since March 2007 when it was 104.5. Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer of future sales.
Lawrence Yun, NAR chief economist, said “The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules,” he said. “No doubt many first-time buyers are rushing to beat the deadline for the $8,000 tax credit, which expires at the end of next month… All we can say for certain is sales will decline when the tax credit expires because we are not yet on a self-sustaining recovery path. It also raises a risk of a double-dip recession,” he said. “Extending and expanding the tax credit is the best tool in our arsenal to encourage financially qualified buyers to stimulate the economy and help reduce the budget deficit.”
