Pending sales of existing homes up to nearly two-year high

courtesy of The Los Angeles Times

More Americans are signing contracts to buy existing homes than at any time in nearly two years, boosting the housing industry’s slow recovery, according to the National Assn. of Realtors’ index of pending home sales.

The measure is up 2% to 97 in January after slipping 1.9% in December. The index of deals for previously owned homes is up 8% compared with the 89.8 level from January 2011.

Last month saw the highest point on the index since April 2010, when consumers drawn by a home-buyer tax credit pushed the figure to 111.3. That was the last time the measure exceeded 100 -– the benchmark for industry health.

The index showed year-over-year increases in every region – a 9.8% hike in the Northeast, a 10.8% rise in the Midwest, a 10.5% boost in the South and a smaller 0.7% uptick in the West.

Contracts are usually signed a month or two before a deal closes and the home purchase is finalized, making the pending-sales index a leading indicator for where the market is headed. The Realtors group said last week that existing home sales in January were up more than 4% to an annual rate of 4.57 million.

Housing experts such as Lawrence Yun, the Realtor group’s chief economist, credit the sliding unemployment rate -- which fell to its lowest point in three years in January -- as well as a downward trend in home prices and a supply of homes that is at a nearly seven-year low.

"Movements in the index have been uneven, reflecting the headwinds of tight credit, but job gains, high affordability and rising rents are hopefully pushing the market into what appears to be a sustained housing recovery," Yun said in a statement.