Thursday, May 31, 2012

Slowdown in Pending Home Sales Effects New Home Sales

Pending home sales plunged in April but an overall upward trend remained firmly in place amid a slowly recovering housing market, said a spokesperson from the National Assoc. of Realtors yesterday.  A lot of sellers want to move up to a new home but can't right now because their buyers can't get a mortgage.

Despite mortgage rates at record lows, tightened lending conditions and falling home prices have kept many would-be buyers on the sidelines.

The National Association of Realtors said its index of pending home sales, or contracts signed but not closed, dived 5.5 percent to 95.5 in April, from a downwardly revised 101.1 in March. An index level of 100 generally indicates a healthy pending home sales pace.

The decline snapped three straight months of solid gains but nevertheless pending home sales were notably higher in April -- by 14.4 percent -- than a year ago.

The US housing market is still bottoming out six years after a price bubble burst, stymieing the economy's recovery from a deep 2008-2009 recession.

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