Pending home sales in U.S. fall in May

Pending home sales in U.S. fall in May
WASHINGTON: Sales of previously-owned houses in the U.S. fell by an unexpected 3.5 per cent in May, compared with April, a report by the National Association of Realtors claimed Tuesday.

This is in contrast with a marginal revival expected by economists. In April such sales had come down 3.2 per cent.

On a year-on-year basis, the sales are down 13.3 per cent and down 21 per cent compared with the peak sales figure in 2005.

The report said pending sales fell 8.9 per cent in the Midwest and 7.6 per cent in the South, while sales rose 5.6 per cent in the West and 3.8 per cent in the Northeast. The sale is termed pending when the contract is signed and the association describes it as sold only when the sale closes, normally after two months.

The association said its index of pending homes sales for May declined to 97.7 from April's downwardly revised 101.2. The index is considered a mostly reliable indicator of existing-home sales.

A spokesperson for the association said housing activity in the country is being affected by the tighter lending norms and a dwindling buyer confidence. He, however, added pending home sales should become steady through the current year.

The report is based on some 40 per cent of sale deals made in the multiple listing service, which is used by real estate agents. It does not cover prices of houses.

Both new and existing home prices in the country have been falling year over year as there is a glut situation in the market. The problems in subprime mortgage market have affected home sales to a large extent.