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Pending home sales jump 6.7 percent

(The Business Journal of Milwaukee) Lower prices and attractive mortgage rates are breathing new life into housing, with one measure of sales posting its fourth increase in the last five months.

Pending sales of existing homes, or contracts signed but not closed, rose 6.7 percent in April, according to the National Association of Realtors, April's pending sales were up 3.2 percent from a year ago, the NAR says.

The biggest increase in April was in the Northeast, where pending sales jumped 32.6 percent from the previous month. In the Midwest the index rose 9.8 percent from last month and is 11.1 percent above April 2008. The index in the South slipped 0.2 percent from March but is 3.5 percent higher than a year ago. In the West the index rose 1.8 percent in March but is 2.9 percent below April 2008.

The NAR's pending home sales index is a forward looking gauge, and the group cautions that it is more volatile than actual closed sales.

"The relationship between contracts on pending home sales and closings on existing home sales is taking longer than in the past for several reasons," says NAR chief economist Lawrence Yun. "Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment."

Still, Yun says he believes the housing market has already bottomed out in some areas.

The group last week reported closed sales of existing homes rose 2.9 percent in April.

The NAR's housing affordability index was also at its second-highest level on record in April.

 

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