Contracts to buy U.S. homes rose more than expected in October, a sign the housing market recovery advanced into the fourth quarter despite a huge storm and concerns over looming tax hikes.
The National Association of Realtors said last week its Pending Home Sales Index, based on contracts signed in October, gained 5.2 percent to 104.8. Economists polled by Reuters had expected signed contracts, which usually become sales after a month or two, to rise 0.8 percent last month.
The housing market is steadily healing after collapsing in 2006, supported by modest job gains, increased job security and record low mortgage rates. The broader economy has been constrained by concerns the government’s plans to slash the budget deficit next year could trigger a recession. This has hit business confidence, although consumer sentiment has nevertheless improved since the summer. “We’ve had very good housing affordability conditions for quite some time, but we’re seeing more impact now from steady job creation,” said NAR chief economist Lawrence Yun. Yun said the data showed some impact from superstorm Sandy, a deadly storm that slammed into the U.S. East Coast in late October.