Pending home sales rise in August by Magdalena Rosova

Pending sales of American single-family homes incredibly rose in August to the highest in over a year, according to Pending Home Sales Report for August released by the National Association of Realtors (NAR) on Wednesday.

Pending Home Sales Index (PHSI), that is released during the first week of each month and is designed to be a leading indicator of housing activity, showed a jump of 7.4 percent in August.

The rise was fueled by a significant increase in west coast sales activity.

Some analysts say that the jump is influenced by chaos in global financial markets as well and therefore may be only temporal. "Housing at first impacted the economy and the economy is now impacting housing in a vicious cycle," said Nigel Gault, leading U.S. economist at Global Insight in Lexington, Massachusetts.

The most interesting about the jump of sales is that economists had expected absolute opposite – drop by 1.8 percent.

The Government took under control the biggest home funding companies Fannie Mae and Freddie Mac in September. Economists hope that the takeover will bring rates down and buyers back into the market.

Pending home sales increased in all regions in August: 18.4 percent in the West, 8.4 percent in the Northeast, 3.6 percent in the Midwest and 2.3 percent in the South as well.

The NAR predicts that mortgage rate will rise to 6.6 percent by the end of next year. Their another forecast is that already existing home sales will rise to 5.41 million next year and new home sales will fall to 471.000 in 2009.


related story: http://bstocksdev.weblogsinc.com/2008/10/08/pending-home-sales-rise-in-august/

by Magdalena Rosova for PocketNews (http://pocketnews.tv)

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edited by Beata Biskova