Pending homes fall in June, supply blamed

WASHINGTON,| Thu Jul 26, 2012 – Contracts to buy previously owned U.S. homes unexpectedly fell in June as fewer properties came on the market, an industry group said on Thursday, pointing to weak home resales in July.
The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in June, slipped 1.4 percent to 99.3. May’s reading was revised down to show a 5.4 percent increase from a previously reported 5.9 percent.
Economists polled by Reuters had expected signed contracts, which become sales after a month or two, to rise 0.2 percent.
“Buyer interest remains strong but fewer home listings mean fewer contract signing opportunities,” said NAR chief economist Lawrence Yun.
“We’ve been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors.”
Pending home sales were up 9.5 percent in the 12 months to June. Home resales fell sharply in June.
Contracts in the Northeast fell 7.6 percent in June and slipped 0.4 percent in the Midwest. In the South, contracts declined 2.0 percent.
The West saw a 2.6 percent increase in contracts in June.

October existing home sales rise 1.4 percent; low interest rates play a part

WASHINGTON  ― U.S. existing home sales unexpectedly rose in October as low interest rates for mortgages and rising rents led more homebuyers into the market, the National Association of Realtors said on Monday.

Sales climbed 1.4 percent to an annual rate of 4.97 million units from September’s revised rate of 4.90 million, the NAR said. Forecasters in a Reuters poll had expected the annual rate to fall to 4.8 million.

Despite the modest increase in sales, the median sales price for existing homes was 4.7 percent lower in October than it was a year earlier.

NAR chief economist Lawrence Yun said the increase in sales comes amid “several improving factors that generally lead to higher home sales such as job creation, rising rents and high affordability conditions.”

The U.S. Federal Reserve has held short-term interest rates at nearly zero since 2008 and has expanded its balance sheet in a bid to get credit to businesses and households.

That has helped bring mortgage rates to near-record lows.

Still, while many other sectors of the economy have found their feet, housing continues to lag abysmally, held back by high rates of foreclosure and homes that have dropped dramatically in value.