2017.11.2910:22:00UTC+00U.S. Pending Home Sales Jump Much More Than Expected In October

Primarily reflecting a bounce back in the South after hurricane-related disruptions in the previous month, the National Association of Realtors released a report on Wednesday showing a bigger than expected jump in pending home sales in the U.S. in the month of October.

NAR said its pending home sales index surged up by 3.5 percent to 109.3 in October after dipping by 0.4 percent to a downwardly revised 105.6 in September. Economists had expected pending home sales to climb by 1.0 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

With the much bigger than expected increase, the pending home sales index reached its highest reading since June but is still 0.6 percent lower than a year ago.

"Last month's solid increase in contract signings were still not enough to keep activity from declining on an annual basis for the sixth time in seven months," said NAR chief economist Lawrence Yun.

He added, "Home shoppers had better luck finding a home to buy in October, but slim pickings and consistently fast price gains continue to frustrate and prevent too many would-be buyers from reaching the market."

The bigger than expected increase in pending home sales came as pending sales in the South spiked by 7.4 percent in October after slumping by 3.0 percent in September.

Pending home sales in the Midwest also showed a notable 2.8 percent increase, while pending sales in the Northeast edged up by 0.5 percent. On the other hand, pending sales in the West fell by 0.7 percent.

Yun forecast existing home sales to finish at around 5.52 million for the year, which would be an increase of 1.3 percent from 2016. The national median existing home price is expected to increase around 6 percent.

On Monday, the Commerce Department released a report showing an unexpected jump in new home sales in the month of October.

The report showed new home sales surged up by 6.2 percent to an annual rate of 685,000 in October from the revised September rate of 645,000.

The notable increase surprised economists, who had expected new home sales to drop to a rate of 625,000 from the 667,000 originally reported for the previous month.

With the unexpected increase, new home sales reached their highest annual rate since hitting 727,000 in October of 2007.

NAR released a separate report last Tuesday showing existing home sales jumped by much more than anticipated in the month of October.

The report said existing home sales surged up by 2.0 percent to an annual rate of 5.48 million in October from a downwardly revised 5.37 million in September.

Economists had expected existing home sales to climb by 0.7 percent to a rate of 5.43 million from the 5.39 million originally reported for the previous month.