The Loan Consultants - Home sales contracts in 7-month soar

Home sales contracts in 7-month rally
Realtors' index rises 6.4% in August for 7th straight gain as tax break cut-off point boosts activity.

The Loan Consulants

The rise far surpassed economists' expectations -- a panel of analysts surveyed by Briefing.com had looked for a 1 percent rise. outstanding home sales rose 3.2% in July. The Loan Consultants
outstanding sales are considered a forward indicator of housing market health since contract signings predate exact closings, which sometimes happen two to three months later. August contract signings show up in October and November NAR statistical data as existing home sales.

Housing markets have gained some ground latterly as a tax subsidy for first-time home purchasers -- which is booked to expire Nov. Thirty -- stimulated sales of starter, and other, houses.
One problem in extrapolating future closings from contract signings is that there are continuing issues getting mortgages which will scuttle many deals, according to Yun.
'The rise in outstanding home sales shows buyers are returning to the market and signing contracts, but deals are not always closing because of long delays related to short sales, and issues concerning complex new appraisal rules,' he claimed.
Those issues also could also lead to some double counting of prior outstanding sales as buyers whose earlier deals fell through may return to the market and sign new contracts.
Still, the oversized gain in outstanding sales will surely transpose into some increase in closings, and the report added to a number of other positive recent indicators that housing markets are at least stabilizing, if not in full-blown recovery.

Not all economic and housing indicators have been pointing up.
Foreclosure filings are still well above ordinary and they threaten to go far higher as the details of many toxic mortgages,eg interest-only loans and option ARMS, reset over the following 6 to twelve months and send the monthly home loan payments of owners soaring.

Another housing market question mark is the status of the tax subsidy for first-time homebuyers, with the industry fearing that home sales could drop sharply if it is's allowed to expire.

There are , however , many efforts in Congress to increase the credit and even to grow it to all home purchasers, not just first-timers. That might turbo-charge home sales if it goes through.