October 4 2010 (Jeff Alan)
Signed contracts to buy homes were up 4.3% in August compared to July according to the National Association of Realtors (NAR), but still lagged remained below last years pace.
NAR said Monday that its seasonally adjusted index of sales agreements for previously occupied homes rose 4.3 percent to a reading of 82.3. Economists surveyed by Thomson Reuters had expected the index would rise to 81.4.
That’s still more than 20 percent below the pace in the same month a year earlier. The index provides an early measurement of sales activity because there is usually a one- to two-month lag between a sales contract and a completed deal. A reading of 100 indicates the average level of sales activity in 2001, when the index started.
The sales report was driven by a nearly 7 percent jump in the South, a 6 percent increase in the West and a 2 percent rise in the Midwest. Pending sales fell nearly 3 percent in the Northeast.
Sales had picked up in the spring when the government was offering some homebuyers tax credits of up to $8,000. Once the incentives expired April 30, sales plunged.
Market analysts believe that potential buyers are waiting to purchase homes because they are worried about jobs and the economy and some have been scared way believing that there is the possibility in further softening of home prices. It’s also believed that potential sellers are holding off putting their homes on the market for the same reasons.