PENDING HOME SALES ON THE RISE

As an update from the National Association of Realtors®, indicates that once again pending home sales saw an increase in March 2010, affirming that home sales is unfolding for the spring home buying season. 

According to the Pending Home Sales Index (PHSI) forward-looking indicator based on contracts signed in March, rose 5.3% to 102.9 from 97.7 in February and is 21/1% above March 2009 when it was 85.0 which is an increase from the February 8.3%. This data reflects those contracts and not closings occurring usually with a delayed time of one or two months.

It is generally agreed that the home buyer’s tax credit was a contributing factor that has helped stabilize the market. According to Lawrence Yun, chief economist, “…in the months immediately following the expiration of the tax credit, we expect measurably lower sales,” he said. “Later in the second half of the year, and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, ad from a return of buyer demand as they see home values stabilizing.”

Across the country, the PHSI in the Northeast declined 3.3% to 75.1 in March but remains 27.2% higher than March 2009. The Midwest index increased 1.2% to 98.9 and is 18.5% above a year ago. The South pending home sales jumped 12.7% to an index of 121.2, which is 28.3% higher that March 2009. Here in the West, the index rose 1.9% to 99.9 and is 8.8% above a year ago.

 “Another encouraging sign is the improvement in the availability for jumbo and second-home mortgages,” Yun said,  “As bank balance sheets strengthen, it is just a matter of time before lending of non-government-backed mortgages steadily opens up.”

For more information, visit www.realtor.org.
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