Pending home sales fall in July
The number of purchase contracts signed on previously owned houses declined in July, according to industry data, the latest sign the nation's housing market remains troubled.
The National Assn. of Realtors’ pending home sales index fell to 89.7 last month. That was a 1.3% decline from June, but 14.4% above the July 2010 level.
Contracts are a leading indicator for home sales and most deals close within months of a contract being signed. A level of 100 on the home sale index is equal to the average monthly activity during 2001, which the real estate group considers a historically healthy level.
The nation's housing market has been weak since the expiration of tax credits for buyers in April 2010. This year has been marked by a renewed housing decline with potential buyers concerned over the future of the economy.
Even with the sluggish contract number, the industry group warned that actual sales might even be lower. In particular, short sales -- in which a bank allows a borrower to sell a home for less than what is owed on the property -– take much longer than regular sales and often fall apart easily.
The group blamed the home sale sluggishness partly on the difficulties that less-than-stellar borrowers have getting mortgages.
-- Alejandro Lazo
Photo: Tract homes in Corona. Credit: Konrad Fiedler / Bloomberg