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Wednesday, July 01, 2009

NAR: Pending Home Sales Index Increases Slightly

by Calculated Risk on 7/01/2009 10:49:00 AM

From the NAR: Pending Home Sales Record Fourth Straight Monthly Gain

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in May, increased 0.1 percent to 90.7 from an upwardly revised reading of 90.6 in April, and is 6.7 percent higher than May 2008 when it was 85.0. The last time there were four consecutive monthly gains was in October 2004.
Lawrence Yun, NAR chief economist, cautions that there could be delays in the number of contracts that go to closing. “Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” he said.
Yun is blaming the disconnect beteween pending and existing home sales on the change in apprasial rules, but there are probably other factors too - like rising mortgage rates, tighter lending standards, and the inability of homeowners to sell the current home.