Pending Home Sales Rise Unexpectedly

Pending sales of existing U.S. homes rose modestly in October, bucking Wall Street forecasts, but the decline from a year ago was the third largest on record, a reminder of just how far the housing market has fallen.

The National Association of Realtors reported recently that its Pending Home Sales Index, based on contracts signed in October, was up 0.6 percent at 87.2 from an upwardly revised index of 86.7 in September.

The forward-looking indicator of home sales was more upbeat than expected by economists, who had forecast a decline of 1.0 percent.

Still, the boost in pending sales was not enough to increase analysts’ hopes for a housing recovery anytime soon.

Year-over-year, pending sales were down 18.4 percent, the third-largest drop since the trade group began keeping such records in January 2001.  Only the declines registered in August and September were deeper.

Existing home sales in 2008 should hit a pace of 5.70 million, compared with an expected 5.67 million this year.  The NAR said median home prices would likely fall 1.9 percent this year, but rise 0.3 percent in 2008 to $218,300.

This year’s home price decline would be the first annual decline since the Great Depression.