Housing market may be poised for recovery in 2011

Pending home sales in the U.S. increased in November, indicating a recovery in the housing market may be in the forecast for 2011, according to the National Association of Realtors.

The Pending Home Sales Index rose to 92.2 in November, a 3.5 percent increase from the 89.1 reported in October. The index is based on contracts signed that month, and not closings that usually take some time before they are completed.

The drop in home values may be encouraging more sales, said NAR chief economist Lawrence Yun.

“In addition to exceptional affordability conditions, steady improvements in the economy are helping bring buyers into the market,” he said.

The PHSI in the Northeast inched up by 1.8 percent to 72.6 in November, while in the West it jumped 18.2 percent to 123.3. However, pending home sales in the Midwest and the South fell, and are lower than they were the same time a year ago, meaning those areas probably aren't the best choices for anyone considering relocation.

Some experts believe that 2011 will be the year that the housing market finally recovers from its slump. Freddie Mac chief economist Frank Nothaft said that he believes more jobs will created next year, which will improve the economical conditions of many Americans and lead to improvements in the mortgage and housing markets.

More News