Remember May, 2006? That’s when the Pending Home Sale Index hit its last big high before the market began to tighten: 112.6. We got close to that last October when the first Homebuyer Stimulus Program came into play: 112.4. Not surprisingly, the index had another peak last April when Stimulus Program number 2 happened: 110.9.
The good news right now is that the Pending Home Sale Index showed a strong increase in October, without the additional help of a Stimulus package. The index surged 10.4% over September’s level to 89.3. My guess is that ridiculously low mortgage interest rates coupled with a little flicker of consumer confidence has led to the increase.
There seems to be a lot of good economic news right now. Retailers are having a better time of it this Holiday Season and a number of pundits are predicting a break-out surge in the stock market in the near future. My mental image is America, like Mohammed Ali, leaning against the ropes with gloves held up in defensive passivity as negative economic forces pound away; then suddenly coming to life to win the match. I think the negative forces are growing weary and our rope-a-dope response is about to end.
Just makes me want to go out there and sell something!
To read the full article from NAR (and get a video dose of the coolest economist in the biz, Lawrence Yun) go HERE.