According to the National Association of Realtors, the first month of the final quarter of 2014 saw home sales continue to stay ahead of last year, even as pending sales dropped. As the year draws to a close, there are signs the U.S. economy is continuing to improve, which should continue to support a relatively stable housing market.

House Sold

Home with sold sign, courtesy of https://www.aag.com/, CC BY-SA 2.0.

The Pending Home Sales Index dipped to 104.1 in October. That’s down from 105.3 a month earlier, but still well over the 101.9 the index posted in October 2013. October marks the sixth straight month the index has been above the triple digit mark, a sign of at least average home sales activity. According to data released by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD), the seasonally adjusted sales rate in October was 458,000, 1.8% higher than the previous year.

Home sale prices are also on the rise, even though the pace is slower than in 2013. The median existing-home prices for all homes in October reached $208,300. That puts the monthly median price growth for the year at 5.8%, just more than half of the 11.5% we saw in 2013.

Both permits and starts for single-family housing were up; construction of single-family homes was up 4.2%, and the seasonally adjusted rate of home starts was 696,000. The inventory of new single-family homes increased to 212,000, which is a 5.6-month supply at the current sales rate. National Association of Home Builders (NAHB) announced that the Housing Market Index (HMI) of U.S. single-family home builder confidence rose again for the fifth consecutive month to 58. When the HMI is above the tipping point of 50, it is a sign that builders are feeling confident in the new homes market.

Another solid stat: the size of single-family homes has declined over the last 6 months, a good sign that first-time homebuyers are returning to the market.

With 2015 right around the corner, there are signs that the new year could continue to see the economy recover and the housing market strengthen. Third-quarter GDP growth was revised up to 3.9% due to improved investment and personal consumption expenditures. Job growth has been widespread, led by gains in the relatively high-paying professional and business services sector, and indicators of consumer sentiment are near post-recession highs.

As we enter the home stretch of 2014, everyone in the real estate industry will be watching the final housing numbers. What are your thoughts? Will this year end strong enough to propel 2015 into a great year?