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Pending sales of existing homes drop 3.5 percent

Drop in number of contracts signed

Pending sales of existing homes dropped in December, according to the National Association of Realtors (NAR) who released a report today noting contracts signed (pending sales) in December dropped 3.5 percent for the month after a massive increase just one month prior. Pending sales rose 5.6 percent over December 2010.

Lawrence Yun, NAR chief economist, said the trend line remains positive. “Even with a modest decline, the preceding two months of contract activity are the highest in the past four years outside of the homebuyer tax credit period,” he said. “Contract failures remain an issue, reported by one-third of Realtors® over the past few months, but home buyers are not giving up.”

Yun said some buyers successfully complete the sale after a contract delay, while others stay in the market after a contract failure and make another offer. “Housing affordability conditions are too good to pass up,” he said. “Our hope is lending conditions will gradually improve with sustained increases in closed existing-home sales.”

According to NAR, pending home sales in the Northeast declined 3.1 percent to 74.7 in December and is 0.8 percent below a year ago. In the Midwest the index rose 4.0 percent to 95.3 and is 13.3 percent higher than December 2010. Pending home sales in the South slipped 2.6 percent to an index of 101.1 in December but are 4.9 percent above a year ago. In the West the index fell 11.0 percent in December to 107.9 but is 3.7 percent higher than December 2010.

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For the third straight month, sales of resale homes have risen, while home prices continue to slide. Some claim the housing market is recovering, others claim we are near the bottom, while other experts opine that we are not yet close to a recovery, but mortgage application volume and sales of resale homes are on the rise, even in light of tight lending.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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