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Pending home sales take an April dive

May 27, 2011 | 12:46 pm

Pending sales are becoming more scarce The number of homes under contract fell in April, according to an industry index, casting further doubt on the housing market’s chances for a near-term recovery.

The National Assn. of Realtors said its index for pending home sales, which is based on the number of contracts signed each month, fell 11.6% and is down 26.5% from the same month last year. The index hit 81.9 last month. An index level of 100 is considered healthy.

Pending home sales surged a year ago because April 2010 was the last month in which buyers could sign a contract and qualify for a federal tax credit. Home sales and prices have been weak ever since that credit expired.

The poor April showing -- and a downwardly revised March figure --  does not bode well for the spring shopping season, typically the most important month for the housing market. Lawrence Yun, the chief economist for the real estate group, said in a news release that the drop was not encouraging.

“The pullback in contract signings is disappointing and implies a slower than expected market recovery in upcoming months,” Yun said. “The economy hit a soft patch in April from sharply rising oil prices, widespread severe weather with the heaviest precipitation in 20 years, and a sudden rise in unemployment claims.”

The pending homes sales index in the West fell 8.9% from the prior month. It rose 1.7% in the Northeast, fell 10.4% in the Midwest and dropped 17.2% in the South.

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Freddie Mac: Mortgage rates still falling

Mortgage rates fall to lowest level of 2011

-- Alejandro Lazo

Photo: A home under contract for sale in Massachusetts. Credit: Associated Press

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