Pending sales of existing U.S. homes rose 5.2% in October

Jobless Claims

Labor Department figures showed today that fewer Americans filed applications for unemployment benefits last week as the job-market disruptions wrought by superstorm Sandy faded. Jobless claims dropped by 23,000 to 393,000 during the period.

Two of four regions showed a gain in October pending home sales, according to today’s report from the real-estate agents’ group. That included a 15.6 percent jump in the Midwest and a 5.5 percent gain in the South. They dropped 0.1 percent in the Northeast and 1.1 percent in the West.

Pending home sales are considered a leading indicator because they track contract signings. Purchases of existing homes are tabulated when a contract closes, typically a month or two later, and made up more than 90 percent of the housing market last year.

New-home sales, logged when contracts are signed, dropped 0.3 percent to a 368,000 annual pace last month following a revised 369,000 rate in September that was weaker than initially reported, the Commerce Department said yesterday.

Home Sales

Sales of previously owned U.S. homes increased 2.1 percent to a 4.79 million annual rate in October, exceeding the median forecast of economists surveyed by Bloomberg, according to data from the Realtors’ group on Nov. 19.

Property values also are picking up. The S&P/Case-Shiller index of home prices in 20 cities showed home prices rose in the year ended in September by the most since July 2010, according to a Nov. 27 report.

Record-low borrowing costs have fueled demand for those able to get financing. The average rate on a 30-year, fixed mortgage declined to 3.31 percent last week, the lowest on record, according to McLean, Virginia-based Freddie Mac.

Fed Chairman Ben S. Bernanke said the central bank will take action to speed growth and spur a rebound in a housing market facing obstacles such as too-tight lending rules.

“We will continue to use the policy tools that we have to help support economic recovery,” Bernanke said in a Nov. 15 speech in Atlanta.

Bernanke said while tighter credit standards after a collapse in the subprime mortgage market were appropriate, “it seems likely at this point that the pendulum has swung too far the other way, and that overly tight lending standards may now be preventing creditworthy borrowers from buying homes, thereby slowing the revival in housing and impeding the economic recovery.”

Bloomberg News

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