Pending Home Sales Up for Three Months in a Row

The Pending Home Sales Index, rose for the third month in a row 6.7 % from March, and is 3.2% above April 2008. Lawrence Yun, NAR chief economist, said buyers are responding to very favorable market conditions. The $8,000 tax credit is beginning to impact the market, since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.

In the Northeast pending sales rose 32.6 % in April and is 0.8 % above a year ago. The total number of existing-home sales is expected to improve but it is subject to greater variability: Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.

NARs Housing Affordability Index also rose in April from March, and was the second highest monthly reading after January of this year. A family earning $60,900 could afford a home costing $296,800 in April with 20% down assuming 25% of gross income is devoted to mortgage principal and interest. The affordable price was well above the median existing single-family home price in April, which was $169,800.

Lawrence Yun discusses with Realtor Magazine