Pending home sales rose 0.3% in September
The Pending Home Sales Index, a forward-looking indicator based on contract signings, edged up 0.3% to 99.5 in September from 99.2 in August and is 14.5% above September 2011 when it was 86.9. The data reflect contracts but not closings.
"Home contract activity remains at an elevated level in contrast with recent years, but currently appears to be bouncing around in a narrow range," said Lawrence Yun, NAR chief economist. "This means only minor movement is likely in near-term existing-home sales, but with positive underlying market fundamentals they should continue on an uptrend in 2013."
Pending home sales have risen for 17 consecutive months on a year-over-year basis. In September, all regions showed double-digit increases in contract activity from a year ago with the exception of the West.
The PHSI in the Northeast rose 1.4% to 79.3 in September and is 26.1% higher than a year ago. In the Midwest, the index fell 5.8% to 89.5 in September but is 19.3% above September 2011. Pending home sales in the South increased 1.0% to an index of 111.5 in September and are 17.6% higher than a year ago. In the West, the index rose 4.3% in September to 106.9, but is only 0.8% above September 2011.
Consumer spending climbs 0.8% on higher incomes
A Monday report by the Commerce Deptartment showed that consumer spending in the U.S. for September rose more than forecast as household incomes climbed.
Household purchases increased 0.8%, the most since February and topping the 0.6% gain expected by Bloomberg. The September rise followed a 0.5% advance in August.
Incomes rose 0.4%, the most since March.
The economy expanded at a 2% annual pace in the third quarter, boosted by the uptick in household purchases.
“We have some positive momentum that we could gradually build on over time,” Scott Brown, chief economist at Raymond James & Associates, told Bloomberg.
Retail sales in September and August had the best back-to-back showing since late 2010.
Mohawk to purchase Pergo
Mohawk Industries has agreed to purchase Pergo, one of the original manufacturers of laminate flooring, for $150 million in cash. Pergo’s sales in 2011 were approximately $320 million in the United States and Europe, and the deal would include two production facilities in the United States and two in Sweden.
In a prepared statement, Mohawk chairman and CEO Jeffrey Lorberbaum said: "This acquisition complements our specialty distribution network with Pergo’s strength in the U.S. DIY channel. In addition, Pergo leverages our geographic position and provides opportunities to enhance Unilin’s patent portfolio. The combination of the entities offers significant opportunities to optimize the assets of both companies while enhancing the design and product performance of both brands."
Based in Calhoun, Ga., Mohawk is a leading supplier of carpet, ceramic tile, laminate, wood, stone, vinyl and rugs. The company serves both commercial and residential markets.