After a long week perusing over the dismal Existing Homes Sales figures, the much anticipated Pending Home Sales figures came out today with a distinctly different take on the market. Pending home sales take into account properties under contract but not yet closed. Pending home sales rose in April thanks to first-time buyers who led the way in home purchases last month.
According to the NAR, “the Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from a level of 82 in February. It is 1.1 percent higher than March 2008 when it was 83.7.”
NAR chief economist Lawrence Yun, said he felt that it should take a few months for the market to gain momentum.
“This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a down payment,” Yun noted. He concluded his remarks by stating, “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”
In the South pending home sales figures increased by almost 10 percent and is almost 8 percent above a year ago. The Southern region of the United States had the largest increase and the biggest gains over a year ago as compared to other regions of the U.S.
According to the NAR’s Housing Affordability Index, affordability remains high.
The affordability index was 166.7 in March and is more than 30 percent higher than a year ago. NAR President Charles McMillan commented, “Compared to a year ago, the typical family can pay much less in mortgage costs for the same home, or buy a better home without necessarily increasing their monthly payment,” he says. “For buyers who’ve been on the sidelines and have good jobs, the market has never looked more favorable. Homeownership has always offered immediate benefits and long-term value, but the advantages in today’s market are unique.