Friday, April 29, 2011
The National Association of Realtors® has reported that pending home sales increased in six of the last nine months. The Pending Home Sale Index is an indicator derived from signed contracts and showed a rise of 5.1% in March from February. The index also showed that it was 11.4% lower than March of 2010. This was caused by the high number of contract signings by people wanting to cash in on the home buyer tax credit.
NAR’s chief economist, Lawrence Yun feels that market activity has shown an irregular but palpable improvement. “Since reaching a cyclical bottom last June, pending home sales have posted an overall gain of 24 percent and demonstrate the market is recovering on its own,” he stated. “The index means modest near-term gains in existing-home sales are likely, which would be even stronger if tight mortgage lending criteria returned to normal, safe standards.”
“Based on the current uptrend with very favorable affordability conditions, rising apartment rents and ongoing job creation, existing-home sales should rise around 5 to 10 percent this year with sales growth of lower priced homes likely to outperform high-end homes. That means the price trend will reflect more homes sold in the lower price ranges,” he said.
Yun also added, “The good news is that recent home buyers are staying well within budget, leading to exceptionally low loan default rates among home buyers over the past two years.”