US pending home sales rise to over 5-year high

The number of U.S. households that signed contracts to buy homes jumped in October to the highest level in more than five years, a leading U.S. industry group reported on Thursday. The National Association of Realtors (NAR) said its index of pending home sales, which measures the number of contracts to buy previously-owned homes that have been signed but not yet closed, rose 5.2 percent to 104.8 in October, the highest level since March 2007, and marked the 18th consecutive month of year-on-year gain. Buyers were responding to favorable market conditions, said Lawrence Yun, NAR chief economist. "We've had very good housing affordability conditions for quite some time, but we're seeing more impact now from steady job creation, and rising consumer confidence about home buying now that home prices have clearly turned positive," Yun added. The NAR index is a leading indicator of future existing home sales, since there is usually one or two months' lag between signing a contract and closing a deal. A reading of 100 indicates an average level of sales activity in 2001, when the index started. The reading was above the 100 threshold from March 2003 to April 2007, and then sank as the country fell into a deep recession caused by the housing debacle.