LOS ANGELES (AP) â¿¿ Stocks for homebuilders, home improvement companies and mortgage lenders were trading higher on Thursday, buoyed by a report that showed the number of Americans who signed contracts to buy homes in November rose to the highest level in a year and a half.
The National Association of Realtors said 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 federal tax credits aimed at spurring home sales credit expired.
Contract signings usually indicate where the housing market is headed, so a pickup in pending home sales is seen as a positive for future sales.Still, a signed contract for a home can take a couple of months to become final, if it doesn't fall apart before. One third of Realtors say they've had at least one contract scuttled in November and October, up from 18 percent in September, according to the group. Homebuilders, mortgage lenders and other companies vested in a growing housing market are hoping 2012 will mark a turnaround for housing after a dismal 2011. This year will likely be the worst year for new home sales in history. Sales of previously occupied homes are just barely ahead of 2008, which was the worst yearly showing since 1997. High unemployment and weak job growth have deterred many potential buyers. The pending home sales report bodes well for housing-related companies heading into 2012 and ahead of the spring home-selling season, the traditional peak period for home sales. Homebuilders, in particular, got a lift from the report in afternoon trading on Thursday. Hovnanian Enterprises Inc. led the pack with shares rising 9 cents, or nearly 7 percent, to $1.39.