Pending home sales up for fourth month

July 2, 6:37 AMResidential Real Estate ExaminerMichele Lerner

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Pending Home Sales, which look at contracts signed for resale homes are up for the fourth month in a row, according to the National Association of Realtors. Increasing affordability and the first-time homebuyers tax credit are both influencing the market.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in May, increased 0.1 percent to 90.7 from an upwardly revised reading of 90.6 in April, and is 6.7 percent higher than May 2008 when it was 85.0. The last time there were four consecutive monthly gains was in October 2004.

Lawrence Yun, NAR chief economist, cautions that there could be delays in the number of contracts that go to closing.
“Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” he says. “Rises in contract activity show buyers are becoming more active even as they face much more stringent loan underwriting standards. Speedy clarification of the appraisal rules could smooth a housing market recovery and support the overall economy.”

Regionally, pending home sales increased the most in the Northeast, rising 3.1% in May, 6.8% over one year ago. In the West, pending home sales rose 2.2% in May, up 0.7% over May 2008. In the Midwest, the index slid 1.3% but this is still 11.4% above May 2008. In the South, the pending home sales index dropped 1.7% in May, but this wasy 7.9% higher than a year ago.
 

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