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US Pending Home Sales Rebound in October

Pending sales of US homes surged in October to the highest level in nearly a year after three straight months of declines, an industry survey showed Wednesday.

The National Association of Realtors said its pending home sales index rose to 93.3 in October, a 10.4 percent jump from September’s reading of 84.5.

The data reflects contract signings but not closings. On a 12-month basis, pending home sales were up 9.2 percent from October 2010, NAR said.

Last month’s number was the highest since November 2010, when the index hit 94.5, and could signal a slight improvement in the depressed housing market.

“Although contract signings are up, not all contracts lead to closings. Many potential home buyers inadvertently hurt their credit scores and chances of getting a mortgage through easily averted actions, such as cancelling an old credit line while taking on a new one,” said Lawrence Yun, NAR chief economist.

But with mortgage interest rates hovering at record lows, combined with pent-up demand from buyers who normally would have entered the market in recent years, the improved pending sales numbers offer hope that more buyers are entering the market, Yun said.

Last week NAR reported that sales of previously owned home rose slightly in October, following a decline the prior month.

Copyright © 2011 AFP

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