A stabilizing trend in the national housing market is likely to continue, according to the latest reading on pending home sales published by the National Association of REALTORS.
The Pending Home Sales Index, based on contracts signed in November, eased by 0.5% to 107.0 from an upwardly revised reading of 107.5 in October, and is 11.4% lower than November 2005. The decline from year-ago levels has been steadily narrowing since July, which was 16% lower than the same month in 2005.
David Lereah, NAR’s chief economist, said that “the index is pointing toward fairly stable home sales in the near future,” he said. “That is another indicator that home sales likely bottomed-out in September.”
The index is derived from pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed; pending sales typically are finalized within one or two months of signing. An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined and the first of five consecutive record years for existing-home sales. Nashville has experienced indexes much closer to 115. This is a great market to purchase investment property.
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