The U.S. housing market received some good news on Thursday as the National Association of Realtors (NAR) reported that pending home sales jumped in October, showing a positive upward trend since hitting bottom in June.
The pending home sales index rose 10.4% to a level of 89.3 based on contracts signed in October from 80.9 in September, according to an NAR news release.
Pending home sales in June were notably lower in contrast to a spring 2010 surge when buyers rushed to take advantage of the home buyer tax credit. The NAR's pending home sales index in June dropped 2.6% to a reading of 75.7 based on contracts signed from 77.7 in May, and was 18.6% below June 2009.
However, the index currently remains 20.5% below a surge to a cyclical peak of 112.4 in October 2009, which was the highest level since May 2006 when it hit 112.6.
Excellent affordability conditions are drawing home buyers, but the housing market still has a long way to go, said NAR chief economist Lawrence Yun in a statement.
“It is welcoming to see a solid double-digit percentage gain, but activity needs to improve further to reach healthy, sustainable levels,” Yun said. “The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market and consequential boost to household formation will help the recovery process going into 2011.”
Read about pending home sales in September at AdvisorOne.com.