Pending Home Sales Increase in July

The sales of existing homes has been relatively low in recent months. However, July saw an increase of buyers who entered into contracts to buy homes that were previously occupied by homeowners. In fact, there was a 5.2 percent increase in pending home sales for July when compared to the previous month. That number is still below the number of pending home sales calculated in July 2009.

The 5.2 percent increase may not seem so exciting, however, once you find out that June’s figures were the lowest on record. The figures are based on an index of 100 and July’s index reading was 79.4. Compare that to the 75.5 in June. That index reading has been rather low due to the economic problems and the recession, but it jumped above 100 about a year ago when the federal government announced that it would be offering tax incentives to homebuyers.

While there was an increase in pending home sales, many potential buyers are still hesitant about buying a home in this economic climate. Job security is a main factor in determining their decision while there are many potential buyers who expect the prices to fall even farther. In addition, the tighter lending guidelines and qualifications to get a loan are holding a huge number of potential buyers back from achieving home ownership at this time.

Home sales continue to remain at a low despite the fact that mortgage rates have been lower than ever. If you qualify, you can get a 30-year fixed rate mortgage for about 4.32 percent. That’s a .04 percent drop from last week. The good news is that these rates continue to drop. This is the tenth week out of 11 weeks in which the rates have dropped and many are wondering how much lower they are going to go. Analysts are saying that the low sales figures despite the low mortgage rates are an ominous indicator of the overall insecurity that people are feeling with their jobs and finances. Few people have confidence in their economic future and buying a home at this time would only make matters worse.

Sales were up in the various regions of the United States. The South saw a one percent increase in home sales in July while the Midwest had a 4 percent increase. The largest increase was in the West at 12 percent and the Northeast region experienced a 6 percent increase. Those figures are good news, but they could be better. It’s going to take some time before this problem gets straightened out so get ready for a bumpy ride.