Alan Zibel
USA Today
WASHINGTON — The volume of signed contracts to buy previously occupied homes rose for a seventh month in August as buyers rushed to take advantage of a tax credit for first-time owners that expires at the end of November.
The National Association of Realtors says its seasonally adjusted index of sales agreements rose 6.4% from July to 103.8. It was the highest since March 2007 and 12% above a year ago. Economists surveyed by Thomson Reuters expected the index would rise to 98.6.
NAR senior economist Lawrence Yun noted that not all contracts are turning into closed sales within an expected timeframe.
“The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules,” he said.
Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer of future sales.
But, new rules for home appraisals and rigid lending standards have scuttled or delayed many final sales recently.
In a related report on construction spending Thursday, the Commerce Department said private residential construction surged 4.7%, largest advance since November 1993, after 0.6% rise the prior month.
Contributing: Reuters
Copyright 2009 The Associated Press. All rights reserved