Record Pace for Contracts on New Homes

by September 2, 2009 • 0 comments

The National Association of Realtors reported Tuesday that its index of pending home sales rose 3.2% in July from June marking the sixth consecutive month of increases. Though not quite as high as the 3.6% increase reported in June, July’s increase marks the first time the index has posted six months of increases since NAR began tracking pending home sales in 2001. Economists generally expected a July increase of only 1.5%. NAR Chief Economist, Lawrence Yun, said in a written statement that “momentum in the housing market has clearly turned for the better.” “The recovery is broad-based across many parts of the country,” Yun said. “Housing affordability has been at record highs this year with the added stimulus of a first-time homebuyer tax credit.”

Mortgage rates have managed to ease slightly as bond prices have risen over the past few days as the Dow has shed over 200 points in the past two days in a sign that investors may finally be pulling back from what many have seen as a premature rally over the past six months. Thirty-year, fixed-rates fell to 5.25%, approaching a six month low and fifteen year rates hovered near 4.50%. We have yet to see any drop in jumbo rates which have remained above 7% for some time with little hope of relief in the foreseeable future as the secondary market for jumbos is nearly non-existent. Look for rates to remain in their current range with the possibility of further easing not our of the question over the coming week.

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