Pending Home Sales Down in November

I like the quote from the JP Morgan Chase economist. ``The housing market frenzy that enticed potential homebuyers to rush into purchases before prices moved still higher has now apparently broken.''

You almost get the feeling that the run-up in house prices in 2004 and 2005 was partially due to the fear of getting priced out of a house forever. Hopefully the Chase economist is correct.

Snip…

[Rising home prices and 30-year mortgage rates that climbed from a month earlier may have put homes out of reach of some buyers in November. Home affordability dropped to a 14-year low in the third quarter, and economists expect house sales to decline this year after setting a record in 2005.

``The extended boom in home sales appears to have run its course,'' in 2006, said Robert Mellman, an economist at JPMorgan Chase Bank in New York, before the report. ``The housing market frenzy that enticed potential homebuyers to rush into purchases before prices moved still higher has now apparently broken.''

Pending homes sales were forecast to fall 1 percent, the median prediction in a Bloomberg News survey of seven economists, from an originally reported 123.8. Estimates ranged from a decline of 0.5 percent to 1.5 percent. The index averaged 125.3 in the first 10 months of last year, compared with 120 in the same period of 2004. Its base value of 100 represents the 2001 average.]

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