Though November is not typically a busy time for real estate activity, agreements to purchase residents was rather high.
A new report from the National Association of Realtors reveals that pending home sales were up in November, bringing the Pending Homes Sales Index to 106.4.
Real estate records from NAR show pending sales increased 1.7 percent from the previous month, boosting the index up from 104.6 in October. This month's activity is 9.8 percent more than recorded in November last year, bringing the index to the highest level since it reached 111.3 in April 2010. On a year-over-year basis, pending home sales have been on the rise for the last 19 months in a row.
""Even with market frictions related to the mortgage process, home contract activity continues to improve," said Lawrence Yun, chief economist of NAR. "Home sales are recovering now based solely on fundamental demand and favorable affordability conditions."
Home sales are expected to continue growing next year, while the estimated gain for 2012 from the organization is around 10 percent. An additional 8 to 9 percent rise is predicted for 2013.
Increased sales throughout this year have contributed to strengthening home prices, while prices have grown more than originally expected by many economists. NAR now expects the median existing-home price has gone up 7 percent this year, and it could increase by 4 percent in 2013.
Most regions see year-over-year growth in home prices
The only region that didn't see a higher PHSI for the month of November was the South, but it didn't suffer from any losses, as it simply matched levels from October, when the index hit 117.2. However, the index remains 13.9 percent higher than levels from November 2011.
In the Northeast, pending home sales were up 5.2 percent, bringing the index to 83.3, up 15.2 percent from the month before. The Midwest has seen comparable improvements over the last 12 months, as the index was up 15.2 percent reaching 103.8, just 0.1 percent higher than pending transactions in October. While the West finally posted a month-over-month gain, the index remains 3.2 percent below levels from last November.
The housing market should remain affordable, with Freddie Mac's recent prediction of continued low mortgage rates in 2013. The U.S. Housing and Economic Outlook for December reveals average rates for fixed-rate mortgages could stay below 4 percent through the duration of 2013.