Based on a poor performance over the last couple of months, the housing market posted an unexpected jump in pending sales of U.S. existing houses by a record 10 percent this past October. As a result, this could be an indication that the housing market may be stabilizing as the job market improves because claims for jobless benefits over the past month have dropped to a two-year low.
With lower prices, cheaper borrowing costs, and more jobs being added monthly, together these might be enough to encourage potential homebuyers in coming months to get off the fence which will greatly help the real-estate market regain its footing since the two federal tax credits expired creating a slump in home sales.
Dean Maki, chief economist at Barclays Capital Inc. in New York said, "The fundamentals that are driving home sales are low mortgage rates combined with job and income growth and that's why housing should be expected to grow in coming months. Housing activity will still look low relative to the boom years, but we expect a solid growth rate to occur."
Lawrence Yun, NAR's chief economist, said in a statement, "The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market and consequential boost to household formation will help the recovery process going into 2011. But activity needs to improve further to reach healthy, sustainable levels."