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Pending home sales rise for the 4th straight month

 According to the National Association of Realtors, its Pending Home Sales Index, a forward-looking indicator based on contracts signed in May, rose 0.1% to 90.7 from a reading of 90.6 in April, and is 6.7% higher than May 2008 when it was 85.0. This incidentally is the fourth straight monthly gain; the last time there were 4 consecutive monthly gains was in October 2004.

Lawrence Yun, NAR chief economist, cautions that there could be delays in closure of home contracts. "Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions," said Yun. "The pronounced increase in April and the fact that May sustained this rise does indicate that actual existing home sales are poised to rise in the coming month or two," said Joshua Shapiro, chief U.S. economist for MFR. On a regional basis, the pending home sales index rose 3.1% to 80.9 in the Northeast, increased 2.2% to 96.9 in the West, dropped 1.3% to 89.2 in the Midwest, and dropped 1.7% to 92.6 in the South.

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