Contracts to purchase existing homes rose in August for the second straight month, the National Association of Realtors said in a report that showed gradual improvement in a sector crucial to freight transportation.
The association’s index of pending home resales rose 4.3 percent in August, more than forecast, after a revised 4.5 percent increase in July that was less than initially estimated. Economists surveyed by Bloomberg News had forecast a 2.5 percent increase in contracts to buy existing homes in August.
The seasonally adjusted index registered 82.3 based on contracts signed in August, but that was well below the 103 reading of August 2009. A reading of 100 indicates the average level of activity in 2001, when the index was started. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.
The pending-sales index is considered a leading indicator of the housing market, which is watched closely for its impact on freight transportation. Housing sales affect the transportation of construction materials and commodities such as furniture and home furnishings, which have slowed since the expiration of tax credits that required contracts to be signed on April 30 and closed by Sept. 30.
By The Numbers: JOC-ECRI Industrial Price Index.
Housing contracts and sales have been slowed by unemployment rates that are expected to remain above 9 percent through 2011, as well as by declining prices that have decreased buyers’ options by making their existing houses more difficult to sell. Sales of previously owned homes rose in August but the annual pace of 4.13 million was the second lowest in a decade.
Contract signings rose in three of four regions in August, led by a 6.7 percent increase in the South. Pending sales were up 6.4 percent in the West and 2.1 percent in the Midwest. They dropped 2.9 percent in the Northeast.
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