After taking a nosedive in April and recovering in May, pending home sales climbed upward at a steady pace over June, according to a sales index released Thursday by the ""National Association of Realtors"":http://www.realtor.org/ (NAR). As regions showed signs of recovery, market watchers faulted leery lenders and bad appraisals for a less-than-timely rebound.[IMAGE]
Releasing the ""Pending Home Sales Index"":http://www.realtor.org/wps/wcm/connect/45e29c8047bdd863a967e993a9f011da/PHS1106.pdf?MOD=AJPERES&CACHEID=45e29c8047bdd863a967e993a9f011da, NAR revealed encouraging gains in unclosed contracts, as signings went up by 2.4 percent to settle at 90.9 in June, a few basis points above 88.8 in May and 19.8 percent atop the 75.9 reading last month.
""For the majority of transactions, the lag time between pending contacts to actual closings is one to two months. Therefore, the two consecutive months of rising activity should lead to overall improvement in closed sales in upcoming months,"" Lawrence Yun, chief economist at NAR, said in a statement. ""Though a higher than normal cancellation rate can hold back final closing figures, it could well be that some past cancellations are nothing more than delayed buying decisions rather than outright cancellations.""
The index recorded pending sales figures in all four regions of the country. The South showed signs of life, rising 4.4 percent to 99.2 on the index, 19.1 percent above June 2010 figures. The West jumped to 107.0 last month, up 6.4 percent from May and 16.4 percent from the same time last year.[COLUMN_BREAK]
Meanwhile, the Midwest and Northeast continued to ail, with pending-home sales for each falling 0.4 percent to 68.9 and 3.7 percent to 79.7, respectively.
NAR revised estimates in pending-home sales to reflect a 5 million total. According to the statement, it predicts few changes among aggregate home prices, which continue to show signs of stabilization.
In a past interview with _MReport_, NAR spokesperson Walter Molony attributed slow signs of recovery to last-minute contract cancellations, subpar appraisals, and stiff credit requirements for borrowers. He added that tight underwriting standards by lenders may prevent signings from closing.
""ABC News"":http://abcnews.go.com/Business/home-sale-cancellations-spiked-june/story?id=14179989 reported Ken Chitester, a spokesperson for the ""Appraisal Institute"":http://www.appraisalinstitute.org/, as saying that ""[b]anks have been hammered. They have had bad loan after bad loan. The bank doesn't want your house, they want your money. If they can't get your money, then they end up with your house. In order to prevent that, lenders have become more cautious in this distressed economy.""
""We're seeing [lending] move in the wrong direction,"" Molony added, projecting that home sales would rise 15 to 20 percent if lenders went back to lending standards before the housing boom and subsequent recession. ""The market is under-performing given market intent.""
In the statement, Yun similarly chalked up market constrictions to unavailable credit and economic insecurity.
""The best way to ensure a more solid recovery in housing is to simply return to normal, sound credit standards so more creditworthy home buyers can get a mortgage,"" the chief economist said.
He added: ""Washington also should not rock the boat with policy changes that would negatively impact affordable credit or otherwise increase the cost of buying or owning a home.""