An index of pending purchase agreements rose to 100.1 last month, up 7.3% from October, according to the National Assn. of Realtors. The reading is the highest since the gauge spiked to 111.5 in April 2010 when buyers rushed to take advantage of an expiring federal tax credit. The November increase followed a 10.4% gain from September to October.
A reading of 100 is typically considered a healthy level, according to the association. The index is up 5.9% from November 2010.
But economists cautioned that many potential buyers are canceling deals before the sale goes through.
"Housing affordability conditions are at a record high and there is pent-up demand from buyers who've been on the sidelines, but contract failures have been running unusually high,” Lawrence Yun, the realty group's chief economist, said in a statement.
The latest jump in pending home sales could be a result of buyers' recommitting to contracts after hashing out problems that had put deals on hold. Most home-buying agreements are finalized a month or two after a contract is signed.
The largest growth in signed contracts last month came in the West, with a 14.9% boost, followed by increases of 8.1% in the Northeast, 4.3% in the South and 3.3% in the Midwest.
Last week, the Commerce Department said that housing starts were up 9.3% in November from October even as statistics from DataQuick showed home sales down 4.2% in California in the same period (though they were up 4% from a year earlier).
Home prices have continued to fall in the nation’s largest cities, dropping 1.2% from September to October, according to the Standard & Poor’s/Case-Shiller index — probably leading some potential buyers to try to wait for the market to bottom out.
-- Tiffany Hsu
Photo: Donna McWilliam / Associated Press