The number of contracts to buy previously owned homes rose in September for an eighth straight month as Americans scrambled to meet a deadline for a homebuyer tax credit.
The index of signed purchase agreements, or pending home sales, rose 6.1% after a 6.4% gain in August, the National Association of Realtors said Monday.
Compared with a year earlier, pending sales rose 19.8%, without adjusting for seasonal variations.
Many buyers accelerated purchases of new homes to take advantage of the $8,000 tax credit before it expires Nov. 30.
Foreclosure-driven price declines and low mortgage rates have also pushed sales up this year. Home sales may cool in coming months unless the credit is extended under a deal worked out by Senate Democrats.
"Home sales continued to show improvement as we see people rush to take advantage of the homebuyer tax credit, although the sustainability of this move is in doubt, and we expect a far slower growth rate going forward," David Semmens, an economist at Standard Chartered Bank in New York, said before the report's release.
Also Monday, new Commerce Department figures showed construction spending rose 0.8% in September, the most in a year, following a revised 0.1% drop in August.
Spending on residential and government projects climbed, while outlays on private commercial construction slumped.
Pending home sales were projected to be unchanged in September from the prior month, according to the median forecast of 33 economists in a Bloomberg News survey. Estimates ranged from a drop of 2.5% to an increase of 5.5%.
The Realtor group has collected pending sales data since January 2001, and it started publishing the index in March 2005.
Pending home sales are considered a leading indicator because they track contract signings. The Realtors' report on sales of existing homes tallies closings, which typically occur a month or two later.
Sales rose in three of four regions from the prior month.
They increased 10.2% in the West, 8.1% in the Midwest and 4.9% in the South. Sales fell 2% in the Northeast.
"As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers," Lawrence Yun the Realtors' chief economist, said in a press release. Still, "We're clearly not out of the woods because an excess of homes remains on the market."
Sales of existing homes surged a record 9.4% in September, to a 5.57 million annual rate, a report last month showed.
The median price fell at the slowest pace in a year as the number of houses on the market shrank.
The Federal Reserve has announced that by March it will phase out its purchases of $1.25 trillion in mortgage-backed securities, signaling that borrowing costs for homebuyers may rise after the average rate on a 30-year mortgage fell to a record 4.78% in April.
"We're expecting we've hit the bottom in housing," William Foote, the chief executive of USG Corp., North America's largest maker of gypsum wallboard, said Oct. 21. Foote, whose company posted its eighth straight net loss last quarter as sales dropped 32% from a year earlier, said it would take time for any sustained improvement to "really kick in."
