Pending home sales rise 6.7 percent in April
June 2, 2009
WASHINGTON -- The number of U.S. home buyers who agreed to buy a previously occupied home took the largest monthly jump in nearly eight years in April.
Home sales appear likely to head upward this summer, potentially to levels not seen since the stock market collapsed.
The National Association of Realtors said its seasonally adjusted index of sales contracts signed in April surged 6.7 percent to 90.3, far exceeding analysts' forecasts. It was the biggest monthly jump since October 2001, when pending sales rose 9.2 percent.
The big boost likely reflects the impact of a new $8,000 tax credit for first-time homebuyers that was included in the economic stimulus bill signed by Obama in February. Since buyers need to complete their purchases by Nov. 30 to claim the credit, "we expect greater activity in the months ahead," Lawrence Yun, the Realtors' chief economist, said in a statement.
Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future existing home sales.
Mortgage rates are rising, making homes less affordable for many borrowers. The average rate for a 30-year, fixed-rate mortgage is around 5.3 percent this week compared with about 5 percent last week, according to Bankrate.com.
The Realtors' index of pending sales contracts was 3.2 percent above last year's levels and has risen for three straight months.
