Rise in Pending Real Estate Sales for October 2011 and Economic Forecast for 2012

The National Association of Realtors (NAR) recently released their analysis of the condition of America’s real estate market for the month of October, and the numbers seem to be pointing in the right direction. Most significantly, their Pending Home Sales Index showed an impressive 10.4 percent increase in pending home sales in the U.S. last month—the largest growth in the index since last year’s October-to-November jump. This good news follows several straight months of marked index growth across the country, and may prove an omen of good fortune for America’s real estate market.

The NAR’s Pending Home Sales Index—measured on a monthly basis—compares current real estate figures to those in 2001, when the housing market was at a peak. An index of 100 represents the average contract activity for that year. The monthly index for October was 93.3, climbing 9.2 percent from last October’s recorded index.

In addition to an increase in the national index, the NAR reported that three out of the four U.S. regions experienced marked improvements in home sale contracts during the month of October. The Midwest experienced a particularly significant monthly growth of 24.1 percent, bringing its regional index up to 88.7. Only the West witnessed a marginal decrease in its index, though it still remains the region with the highest index rating. All four regions showed year-over-year growth in the month of October, especially the Midwest.

Also reported along with the Pending Home Sales Index was the NAR’s December 2011 U.S. economic forecast. The association projected the annual gross domestic product to rise by 1.7 percent by the end of the year, with a 2.5 percent growth the following year.

Existing-home sales should increase as well, according to the NAR’s figures. The organization predicted a 1.2 percent increase in 2011 and a 5.1 increase in 2012. Though the NAR forecasted a decrease in national home prices this year, it expects values to recover some 2.6 percent in 2012.

As for the unemployment rate, it should gradually increase over the next few years—from 9.6 in 2010 to 9 percent this year and 8.6 percent the following year.

See: real estate in Chicago