Buying activity in the housing market increased for a second consecutive month, according to a report from the National Association of Realtors, but housing still remains in the doldrums following the expiration of tax credits earlier in the year.
According to the NAR, the industry group’s pending homes sales index rose 4.3% in August compared with a downwardly-revised 78.9 reading for July.
The rise was more than expected, with economists looking for the index to rise 1% for August, but the index remains down 20.1% from a year ago.
Since the expiration of the first-time home buyers tax credit in April, home buying activity has stalled among both existing homes and new construction. This is despite record-low mortgage rates and a credit market that continues to ease relative to 2008 and 2009.
NAR’s chief economist, Lawrence Yun, said for home buying activity to rise without the help of tax credits “[will depend] more on job creation and an accompanying rise in consumer confidence.”
Pending home sales are a forward-looking indicator that tracks contracts signed on residential real estate, not on sales completed.
Regionally, housing buying activity in the Northeast fell by 2.9% in August but remains up 28.8% from a year ago. Midwest sales rose 2.1% and are down 26.5% from 2009. In the South, pending home sales rose 6.7% and are down 13.1% from August 2009. Sales in the West rose 6.4% but are down 19.6% below last year.
By Ken Sweet FOXBusiness October 4, 2010
Pending Home Sales Rise 4.3% in August - FOXBusiness.com -
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