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US Pending Home Sales Rise for First Time in 6 Months: NAR

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US Pending Home Sales Rise for First Time in 6 Months: NAR

Contract activity for existing single-family homes in the US rose for the first time in six months, according to the National Association of Realtors.

Pending home sales advanced 0.2 percent in November, following a 1.2 percent decline the prior month. A median estimate of economists surveyed by Bloomberg called for a 1 percent gain. Compared to year-ago levels, pending home sales were down 1.6 percent, as rising home prices and mortgage rates continue to keep would-be buyers out of the market.

While the market still favours buyers in most of the country, strong home prices and higher interest rates will likely keep contract activity modest in 2014. According to NAR chief economist Lawrence Yun, the residential real estate market is flattening.

“We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014,” said Yun. “Although the final months of 2013 are finishing on a soft note, the year as a whole will end with the best sales total in seven years.”

Job creation surpassed 200,000 in each of the past two months, as the US economy continues to accelerate. Joblessness fell to 7 percent in November, the lowest level in five years.

Previously-owned home sales are expected to hit 5.1 million in 2013, a gain of almost ten percent over the previous year. The NAR expects the market to stay at that level in 2014 before rising to 5.3 million in 2015. The national median price for existing homes is expected to reach $197,300 in 2013, up almost 12 percent from the previous year. Existing-home prices are expected to rise as much as 5.5 percent in 2014 and 4 percent in 2015.

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