NAR — Pending Home Sales Up 3 Months In A Row
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The National Association of Realtors has reported that pending homes sales — a forward-looking indicator based on contracts signed in April — rose 6.7 percent when compared with March. This is the third monthly increase.
Lawrence Yun, NAR chief economist, said buyers are responding to very favorable market conditions. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he said. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”
It should be understood that not all real estate contracts actually close. Moreover, as Yun explains, “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.”
Affordability
Another reason for the increased interest in real estate concerns affordability. NAR’s Housing Affordability rose to 174.8 in April, the second highest monthly reading on record after peaking at 176.9 in January. The index, says, NAR, began in 1970.
Regional Contracts Rise
NAR says the Pending Home Sales Index in the Northeast shot up 32.6 percent to 78.9 in April and is 0.8 percent above a year ago. In the Midwest the index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008. The index in the South slipped 0.2 percent to 93.0 in April but is 3.5 percent higher than a year ago. In the West the index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008.
NAR President Charles McMillan said there are numerous buyer assistance programs around the country. “Some states are offering bridge loans that allow first-time buyers to use the tax credit for downpayment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location,” he said.
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