“The pullback in contract signings is disappointing and implies a slower-than-expected market recovery in upcoming months,” Lawrence Yun, the NAR’s chief economist said in a statement. “The economy hit a soft patch in April from sharply rising oil prices, widespread severe weather with the heaviest precipitation in 20 years, and a sudden rise in unemployment claims.”…Pending home sales are considered a leading indicator because they track contract signings. Purchases of existing homes are tabulated when a contract closes, typically a month or two later.Previously owned homes sold at a 5.05 million annual rate in April, down 0.8 percent from the prior month, data from the National Association of Realtors showed May 19. All-cash deals accounted for 31 percent of transactions, and distressed properties, including foreclosures and short sales, made up 37 percent, the group said.
The number of Americans signing contracts to buy previously owned homes plunged more than forecast in April, a sign the industry that triggered the recession continues to struggle.The index of pending home resales declined 12 percent after a revised 3.5 percent increase the prior month, the National Association of Realtors said today in Washington. The median forecast in a Bloomberg News survey called for a 1 percent decline.The prospect that foreclosures will continue to drive down property values may keep buyers on the sidelines awaiting further price declines. Unemployment at 9 percent and stricter credit requirements are further signs that a housing recovery may take years to unfold.“This makes me believe it will take longer to clear the excess inventory,” said Michelle Meyer, a senior economist at Bank of America Merrill Lynch in New York. “It pushes the housing recovery even further out into the future. By Bob Willis, May 27, 2011, BB
Also see, Wells Fargo Report: New Home Sales Rose Again in April, but Recovery Still Slow, 05/24/11: New home sales rose 7.3 percent in April to a 323,000-unit annual pace. Due to competition with foreclosure sales, the inventory of unsold homes slid to its lowest level on record. Median prices rose to $217,900. By Wells Fargo’s Economic Commentary