WASHINGTON (Reuters) - Contracts to buy previously owned homes rebounded in October as the market recovered from hurricane-related effects in the South of the country but activity continued lag year ago levels.
The National Association of Realtors said on Wednesday its pending home sales index rose to a reading of 109.3. September’s index was downwardly revised to 105.6.
Economists polled by Reuters had forecast pending home sales rising 1.0 percent last month.
Pending home contracts are seen as a forward-looking indicator of the health of the housing market because they become sales one to two months later.
The housing sector has regained some momentum recently after treading water for much of the year because of a lack of inventory which has driven up prices, and both labor and land shortages.
Compared to one year ago, pending sales were still down 0.6 percent. Contracts surged 7.4 percent in the South as it snapped back after the effects of Hurricanes Harvey and Irma in August and September. Sales also increased in the Northeast and Midwest while they fell 0.7 percent in the West.
The NAR said that the number of homes for sale in October was the lowest for the month since 1999.
“Until new home construction climbs even higher and more investors and homeowners put their home on the market, sales will continue to severely trail underlying demand,” NAR chief economist Lawrence Yun said in a statement.
Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama