On The Money

Pending Home Sales Rise as US Still an Attractive Market

Home Sale PendingSales of previously owned homes in the U.S. reached a 10-month high in February, as investors still consider the country to be an attractive investment property market.

The National Association of Realtors (NAR) report indicated that sellers remain unperturbed by higher mortgage rates and home prices, which are not largely affecting the residential property sector. Signed contracts for the month rose 5.5% to 112.3, according to the Pending Home Sales Index.

Positive Outlook

The improvement on the home index marked the highest reading since April 2016 and the second highest since May 2006. Wells Fargo Securities economic analyst Misa Batcheller said that this provides a positive outlook to housing deals in spring of 2017. Batcheller and other economist have predicted a 2.4% increase in pending home sales for February.

A strong employment market is also driving demand for more homes, which leads to higher home prices. On the bright side, the tolerable winter season has allowed companies to build more homes that are expected to deployed in the coming spring.

Investors’ Choice

Some sellers are taking advantage of strong interest from property investors, who still prefer the U.S. commercial real estate market to the Asia sector, despite several headline-making deals in the latter region.

Major cities such as New York and Los Angeles are among the top investment property destinations, says Americas Housing Alliance, LLC and other investment companies. The Big Apple ranked first in terms of absolute volumes of direct investments between 2014 and 2016.

However, be prudent in screening buyers if you’re planning to sell your home. Property investment companies will likely give you the better value for your house compared to retail investors.

Pending home sales growth serves as a good barometer for economic performance. As the U.S. becomes a hotspot for investment and demand continues to be strong, now is likely a good time to achieve a good return on your investment by selling it at a significant amount.

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