Pending Home Sales Slip Again in Post-Tax Credit Slump

Home sale pendingSigned contracts to purchase homes dropped again in June, setting a new low for a key, forward-looking national index that reflects an anemic housing market.
The National Association of Realtors said Tuesday its pending home sales index declined 2.6 percent to 75.7 based on contracts signed in June. That compares to an upwardly revised level of 77.7 in May. And it is 18.6 percent below June 2009 when it was at 93.
June’s level is the lowest since 2001.
High unemployment, tighter credit standards and the April 30 expiration of homebuyer tax credits have dealt a big blow to the housing market. Moreover, this year is on pace to set a new high for properties hit with foreclosure notices.
“There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” said Lawrence Yun, NAR chief economist. “Over the short term, inventory will look high relative to home sales.
“However, since home prices have come down to fundamentally justifiable levels, there isn’t likely to be any meaningful change to national home values. Some local markets continue to show strengthening prices.”
Yun said he expects mortgage interest rates to remain historically low for the rest of the year, but only modest jobs growth.
“We really need to see stronger job creation to have a meaningful recovery in the housing markets,” he said.
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