US pending home sales rise to highest since 2010

[February 28, 2013]  WASHINGTON (AP) -- A measure of the number of Americans who signed contracts to buy homes rose in January from December to the highest level in more than 2 1/2 years. The increase suggests sales of previously occupied homes will continue rising in the coming months.

The National Association of Realtors said Wednesday that its seasonally adjusted index for pending home sales rose 4.5 percent last month to 105.9. That's the highest since April 2010, when a homebuyer's tax credit was about to expire.

There is generally a one- to two-month lag between a signed contract and a completed sale.

Pending home sales rose in all regions, but just barely ticked up in the West, where a limited supply of available homes is holding back sales.

The increase is the latest positive report for the housing market, which began recovering last year after a deep, six-year slump. Steady hiring and nearly record-low mortgage rates have encouraged more Americans to buy homes. More people are also moving out on their own after living with friends and relatives in the recession. That's driving a big gain in apartment construction and also pushing up rents.

"Housing market activity appears to have ended 2012 on a positive note and is off to a strong start in 2013," Cooper Howes, U.S. economist at Barclays Capital, said in a note to clients.

Sales of previously occupied homes ticked up in January after rising to their highest level in five years in 2012.

And new-home sales jumped 16 percent last month from December to the highest level since July 2008, the Commerce Department said Tuesday.

Home prices, meanwhile, rose by the most in more than six years in the 12 months ending in December.

Steady price increases are also contributing to the housing recovery. They encourage more people to buy before prices rise further. Higher prices also build homeowners' wealth, which can spur more spending and economic growth.

Builders, meanwhile, started work on the most new homes in 4 1/2 years in December. Last year was the best year for residential construction since 2008, just after the recession started.

[Associated Press; By CHRISTOPHER S. RUGABER]

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