Pending Home Sales Plunge 11.6 Percent
Pending Home Sales Plunge 11.6 Percent
The National Association of Realtors reported Friday that the April decline in pending home sales exceeded expectations, dropping the figure to a seven-month low, and delivering a severe blow to economists' outlook on the recovery in the housing market. The group's Pending Home Sales Index fell 11.6 percent in April to a reading of 81.9, the measure's lowest reading since September. Pending home sales are viewed as a barometer of future sales activity because sales typically close about two months after a contract is signed.
Economists were expecting the index to fall, but only by about 1 percent, on average. Insiders say that extreme weather across the South and Midwest in recent months may have had an impact on Americans' searches for homes. Additionally, some analysts cite the high price of gasoline as a factor, saying it could be making consumers nervous about making major investments.
Pending home sales in the South, which has been devastated by an unusually active tornado season, plunged 17.2 percent last month, while sales were also down considerably in the Midwest and the West. Weakness in the housing market is one of the biggest hurdles to the U.S. economy as it continues to recover from the worst downturn since the Great Depression. The economy grew at a 1.8 percent pace in the first quarter, according to a Commerce Department report issued Thursday, after growing at a 3.1 percent rate in 2010's final three months.
The National Association of Realtors reported Friday that the April decline in pending home sales exceeded expectations, dropping the figure to a seven-month low, and delivering a severe blow to economists' outlook on the recovery in the housing market. The group's Pending Home Sales Index fell 11.6 percent in April to a reading of 81.9, the measure's lowest reading since September. Pending home sales are viewed as a barometer of future sales activity because sales typically close about two months after a contract is signed.
Economists were expecting the index to fall, but only by about 1 percent, on average. Insiders say that extreme weather across the South and Midwest in recent months may have had an impact on Americans' searches for homes. Additionally, some analysts cite the high price of gasoline as a factor, saying it could be making consumers nervous about making major investments.
Pending home sales in the South, which has been devastated by an unusually active tornado season, plunged 17.2 percent last month, while sales were also down considerably in the Midwest and the West. Weakness in the housing market is one of the biggest hurdles to the U.S. economy as it continues to recover from the worst downturn since the Great Depression. The economy grew at a 1.8 percent pace in the first quarter, according to a Commerce Department report issued Thursday, after growing at a 3.1 percent rate in 2010's final three months.
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