Contract signings for US homes up in November

Associated Press

WASHINGTON

The number of Americans who signed contracts to buy homes in November rose to the highest level in a year-and-a-half.

Normally, such a gain would suggest a turnaround for the depressed housing market. But a growing number of buyers are canceling their contracts at the last minute, making it a less-reliable gauge.

The National Association of Realtors said Thursday that its index of sales agreements jumped 7.3 percent last month to a reading of 100.1.

A reading of 100 is considered healthy. The last time the index was that high was in April 2010, one month before a federal home-buying tax credit expired.

Contract signings usually indicate where the housing market is headed. There’s a one- to two-month lag between a signed contract and a completed deal.

But a sale isn’t final until a mortgage is closed, and many are falling apart before that happens. One-third of Realtors say they’ve had at least one contract scuttled in November and October, according to the Realtors group. That’s up from 18 percent in September.

Homes are the most affordable they’ve been in decades. Yet this year likely will be the worst year for new-home sales in history. Sales of previously occupied homes are just barely ahead of 2008’s dismal figures — the worst yearly showing since 1997.