Contracts to buy homes up 10.4%

Associated Press

WASHINGTON

The number of people who signed contracts to buy homes jumped in October, marking the third gain since contract signings hit a decade low.

The National Association of Realtors said Thursday its index of sales agreements for previously occupied homes rose 10.4 percent in October. Contract signings were up in every region of the country except the West.

Homebuilder stocks surged after the report was released. Lennar Corp. rose more than 6 percent in morning trading. Toll Brothers Inc., which announced Thursday a surprise profit in the latest quarter, increased more than 3 percent.

Economists had expected contract signings would decline, given the numerous problems facing the housing industry.

With the October gain, contract signings are 18.3 percent above June’s index — the lowest level since the private group began tracking signed contracts in 2001. Still, they remain 20.5 percent below the October 2009 level — the highest point since May 2006, before the housing market collapsed.

A year ago, potential buyers were rushing to close deals to take advantage of a federal home-buying tax credit that initially was set to expire in November.