Pending sales UP
WASHINGTON (Reuters) — Pending sales of previously owned homes in April unexpectedly saw their biggest monthly gain in 7-1/2 years, a report from a trade group Tuesday showed, supporting views the recession is easing. The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in April, rose 6.7% in April to 90.3 from 84.6 in March.
It was the third straight monthly increase and the largest jump since October 2001. The monthly gain took the index 3.2% above its year-ago level in the latest sign the battered U.S. housing sector was stabilizing.
"It's a very positive and encouraging number. It plays into the 'green shoots,' economy stabilization story," said William Hornbarger, senior fixed income strategist at Wachovia Securities in St. Louis.
Economists polled ahead of the report were expecting pending home sales to rise 0.5%. The downturn in the housing market touched off a global credit crisis that sent economies worldwide tumbling into recession. Now, signs are emerging that the global economy is beginning to heal. The association's senior economist, Lawrence Yun, credited improved home affordability and a new government program that provides an $8,000 tax credit for first-time homebuyers for the surge in buying activity. The NAR said its Housing Affordability Index, which blends factors like home prices and mortgage rates, was "in record territory" with 30-year mortgage rates hovering around 5% and an abundance of homes on the market. The last time the trade group's pending home sales index had risen for at least three straight months was the period from July through October 2004 — a housing boom year.
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