Fewer homes sold in the USA

Tuesday, May 31, 2011

Fewer homes sold in the USA

Pending USA home sales fell in April with regional variations following increases in February and March, according to April's Pending Home Sales Index, released by National Association of Realtors.

The index, a forward looking indicator for the U.S. property sector based on contract signings on existing homes, fell 11.6 per cent to 81.9 in April from a downwardly revised 92.6 in March.

The index is 26.5 per cent less than the cyclical peak of 111.5 reached in April 2010, when buyers were rushing to beat the contract deadline for the first time home buyer tax credit, according to the National Association of Realtors (NAR).

Lawrence Yun, the NAR's chief economist believes that that the slowdown in the market may have been caused by recent rising oil price, widespread bad and sudden rise in unemployment levels.

Yun also said that tight credit conditions was also continuing to have a negative impact on the market. The one region that showed gains in the pending home sales index was the Northeast, which gained 1.7 per cent to reach 64.5 in April, 33.4 percent lower than the index a year ago.

“Even with very favourable affordability conditions, job growth and a pent-up demand from abnormally low household formation during the past three years, the recovery will continue to be uneven and sluggish given the ongoing credit constraints,” Yun said.

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