Bucking the trend
As new home construction hits their lowest sales and permits in recorded history and existing home sales dip, there is a tiny bright spot in real estate sales and that is in pending home sales which ticked up 2.1% in February from the prior month and 8.2% from February 2010.
Pending home sales are tracked by the National Association of Realtors and is based on contracts signed in February. Analysts had expected a drop along with other economic indices, pointing to one potential strong point in the market- a willingness for consumers to sign a purchase offer. The key now is to get these buyers in a loan that will actually close.
Thinking long term
Lawrence Yun, NAR chief economist, says it’s important to look at the broader trend. “Month-to-month movements can be instructive, but in this uneven recovery it’s important to look at the longer term performance,” he said. “Pending home sales have trended up very nicely since bottoming out last June, even with periodic monthly declines. Contract activity is now 20 percent above the low point immediately following expiration of the home buyer tax credit.”