Signings to buy homes went up 10.4% in October

WASHINGTON - The number of people who signed contracts to buy homes jumped in October, marking the third gain since contract signings hit a decade low.

The National Association of Realtors said Thursday that its index of sales agreements for previously occupied homes rose 10.4 percent in October. Contract signings were up in every region of the country except the West.

Homebuilder stocks surged after the report was released. Lennar Corp. stock closed up 7.2 percent, while Toll Brothers Inc., which announced Thursday a surprise profit in the latest quarter, closed up 2.2 percent.

Economists had expected contract signings to decline.

With the October gain, contract signings are 18.3 percent above June's index - the lowest level since the group began tracking signed contracts in 2001. Still, they remain 20.5 percent below the October 2009 level - the highest point since May 2006, before the housing market collapsed.

A year earlier, buyers rushed to close deals before a federal home-buying tax credit expired in November. The tax credit was later extended to April 30, and after it expired, housing activity slumped.

Lawrence Yun, the Realtors' chief economist, said that even with the rebound in contract signings in October, housing was being held back by a number of factors from high unemployment to tighter standards on home mortgages.

"A return to more normal loan-underwriting standards and removal of unnecessary underwriting fees for very low-risk borrowers is needed and could quickly help," Yun said.

In a separate report, RealtyTrac Inc. said foreclosure sales plunged 25 percent in the July-September quarter vs. activity in the April-June period, even as the average discount on distressed properties had increased.

by Martin Crutsinger Associated Press Dec. 3, 2010 12:00 AM






Signings to buy homes went up 10.4% in October