Grace

A lot was made out of the 16 percent dip in pending home sales from October 2009 to November 2009, which is usually considered a large decline. Though when looking further into it, it’s not necessarily a reflection on the housing market. Experts are saying it was due almost entirely to buyers’ trying to get closed before the expiring $8,000 first time home buyers tax credit. Proof of that comes from the October pending sales index which went off the charts. It only made sense that after Congress extended the credit through April 30, 2010, buyers didn’t feel the pressure to rush and sign contracts.

The October to November decline might have been alarming, but even with November’s numbers being down, the pending sales number with still a sold 16 percent above November 2008. It’s a good sign that even without the extra incentive provided by the credit, the home sale market is gaining strength for its own fundamental reasons: huge pent-up demand, low prices and great financing. With fewer layoffs being reported plus convincing gains in manufacturing output and retail gains, expect prices and mortgage rates to continue to rise in the months ahead.