Pending home sales of existing U.S. properties jumped to a 1-1/2 year high in November, according to data released on Thursday.
However, despite this data showing improvement in the U.S. housing market for the month, other findings released earlier show that the sector may still be on a rocky ride toward recovery.
Pending Home Sales Highest Since April 2010
The National Association of Realtor’s Pending Home Sales Index revealed that based on contracts signed in November, pending home sales jumped to 100.1. This represents a 7.3 percent increase and is the highest level the association has documented since April 2010.
Economists polled by Reuters had expected pending home sales data to only increase by 2 percent, so the rise in numbers was a pleasant surprise.
And while other data such as home sales and construction suggest a slight improvement may be on the horizon for the U.S. housing market, other signs say that a recovery may still be in the distant future.
U.S. Housing Market Recovery Still Slow
On Tuesday, an S&P/Case-Shiller index release revealed housing prices had dropped in 19 out of 20 cities in the month of October. This drop in prices is nothing new, however.
Prices have continued to fall over the past year, making it difficult for the U.S. housing market to move toward recovery, largely because many homeowners have underwater mortgages and can’t keep up with payments.
Another block in the road toward housing market recovery is the increase in foreclosure and short sales. In November, these types of homes made up 46 percent of all home sales.
With foreclosures continuing to plague the market and home prices on a downward spiral, the minor improvement seen in pending home sales could easily be overshadowed by the other problems the U.S. housing market can’t seem to overcome.
