Pending Home Sale Index Rises Again

The National Association of Realtors' pending home sales index rose 3.7% in October and posted its ninth consecutive monthly gain. The index, considered a leading indicator of future sales, hit 114.1 in October, compared to 110.1 in September. The PHSI has risen 31.8% since October 2008. The upward trend reflects the success of the $8,000 first-time homebuyer tax credit, said NAR chief economist Lawrence Yun. "This means the tax credit is helping unleash pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future," Mr. Yun said. However, the Realtors are expecting a dip in sales in the months ahead followed by a surge in early spring. Their economists are forecasting that 2010 existing home sales will come in at 5.7 million, up 10.8% from this year.