Pending home sales hit five-year high

Pending home sales hit their highest level in more than five years, another sign of the strengthening housing market recovery. 

The National Association of Realtors (NAR) index, which provides insight into the trajectory of the market based on contract signings, increased 5.2 percent to 104.8 in October from an upwardly revised 99.6 in September, the highest level since March 2007. 

"We've had very good housing affordability conditions for quite some time, but we're seeing more impact now from steady job creation and rising consumer confidence about home buying now that home prices have clearly turned positive," said Lawrence Yun, NAR chief economist.

On a year-over-year basis, sales are up for 18 straight months.

The data reflect contracts but not closings.

In a separate report on Thursday, Freddie Mac said mortgage rates remain near record lows, making purchases and refinancing more affordable. 

The 30-year fixed-rate mortgage averaged 3.32 percent this week, up slightly from 3.31 percent last week. 

The 15-year rate, a common tool for refinancing, averaged 2.64 percent, up slightly from 2.63 percent.

Sens. Barbara Boxer (D-Calif.) and Robert Menendez (D-N.J.) are pressing for passage of legislation that would allow homeowners, especially those who are underwater on their loans, to refinance into lower rates. 

The Senate was expected to take up the bill immediately after returning from the long election break but, so far, the measure has been put off.

Boxer told The Hill this week that she wasn't sure when it would reach the floor but reiterated its importance in helping homeowners get a little extra cash in their pockets and, in turn, provide a boost to the economy. 

Although a home-buying tax credit helped buoy sales in part of 2009 and 2010, pending home sales are finally showing clear signs of improvement. 

That trend is also being seen across most regions in the country, as all four areas posted improving conditions from a year ago. 

The index in the Northeast slipped 0.1 percent to 79.2 in October, partly due to Superstorm Sandy slamming into the East Coast. 

In the Midwest, the index jumped 15.6 percent to 104.4 in October and is 20 percent above October 2011. 

"The Northeast saw some impact from Hurricane Sandy, but limited inventory in the West is keeping a lid on the market," Yun said. "All regions are up from a year ago, with double-digit gains in every region but the West." 

Pending sales rose in the South by  5.5 percent, up 17.4 percent from last year. 

In the West, sales declined 1.1 percent in October and are up 0.9 percent above October 2011.

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