The number of Americans signing contracts to buy previously owned homes fell in April by the most in a year, indicating the U.S. housing recovery remains uneven.
The index of pending home resales dropped 5.5 percent following a revised 3.8 percent gain the prior month, figures from the National Association of Realtors showed today in Washington. The median forecast of 42 economists surveyed by Bloomberg News called for no change in the measure.
Mortgage rates at record lows failed to sustain the pace of demand as some buyers may have waited for home prices to decline further. Limited access to credit and persistent foreclosures still weigh on housing, adding to concern it will remain a source of weakness for the world’s largest economy.
“The pattern of demand is sluggish and volatile,” said Yelena Shulyatyeva, a U.S. economist at BNP Paribas in New York, who projected a decline. “Until the supply issue is resolved, we could see further declines in prices and the housing market will continue to hover around the bottom. It’ll be a gradual improvement, we don’t expect anything stronger than that.”
Estimates in the Bloomberg survey ranged from a drop of 4.3 percent to a rise of 3.1 percent. The Realtors group revised March data from a previously reported gain of 4.1 percent.
Stocks fell after the figures and on concern Greece will leave the euro. The Standard & Poor’s 500 Index (SPX) declined 1.4 percent to 1,313.32 at 4 p.m. in New York. The yield on the benchmark 10-year Treasury note tumbled 12 basis points to 1.62 percent at 5 p.m. after touching 1.6085 percent, the lowest in Federal Reserve figures going back to 1953.
Three Regions Decline
Three of four regions saw a decrease, today’s report showed. That included a 12 percent slump in the West and a 6.8 percent decline in the South. Pending purchases rose in the Northeast.
Compared with a year earlier, the index climbed 14.7 percent after a 10.5 percent gain in the prior 12-month period.
Pending home sales provide insight into actual contract closings a month or two later. Purchases of existing homes, which made up about 93 percent of the housing market last year, are tabulated when the contract closes.
Other figures signal demand is improving. New-home purchases, also logged when contracts are signed, climbed 3.3 percent to a 343,000 annual rate in April, a Commerce Department report showed May 23.
Data the previous day showed sales of existing homes increased 3.4 percent to a 4.62 million annual rate, with gains in all four regions.
The Realtors group revised this year’s forecast to 4.66 million previously owned home sales, up from 4.26 million in 2011. It projects 4.92 million purchases in 2013.
Toll Brothers Inc. (TOL) is among the builders reporting growth in orders. Second-quarter profit at the Horsham, Pennsylvania-based company exceeded analysts’ estimates as orders surged 47 percent from a year earlier.
“We are feeling better than we have at any time in the past five years,” Chairman Robert Toll said on a May 23 earnings call. “We would like to say we’re back, but we need a little more confirmation. Nonetheless, it sure feels good compared to the desert we’ve just crossed.”
Borrowing costs remain attractive. The average rate on a 30-year fixed mortgage fell to an all-time low of 3.78 percent in the week ended May 24, according to Freddie Mac data going back to 1971. The average 15-year rate held at 3.04 percent, also a record low, the McLean, Virginia-based mortgage-finance company said.
A real estate agents group’s affordability index, which is based on a combination of resale prices, household income and mortgage rates, reached a record high in the first quarter, a report showed this month.
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