From CNN:
The number of homes under contract for sale fell in March, hitting a record low
for the second consecutive month, according to a report released Wednesday.
The National Association of Realtors' (NAR) Pending Home Sales Index
fell to 83 in March, down 1% from a downwardly revised reading of 83.8 in
February. The rate of decline was in line with a consensus estimate of
economists compiled by Briefing.com.
March's reading was down 20.1% from the same period last year and 35% from the index's peak in April 2005.
and from Bloomberg:
Fewer Americans signed contracts to buy previously owned homes in March for the
second consecutive month as falling prices and tougher loan rules discouraged
buyers.
The index of pending home resales fell 1 percent to 83,
following a 2.8 percent drop in February that was larger than previously
reported, the National Association of Realtors said today in Washington. The
decline matched the median forecast of economists surveyed by Bloomberg News.
The glut of unsold properties is driving down home values, while rising
defaults on subprime mortgages have prompted lenders to restrict access to
credit, representing more hurdles for buyers. The slump in residential real
estate may persist for much of the year, hurting economic growth.
Yet another record low in the pending-sales index .
With home prices falling, inventory surging, and credit and mortgage options limited, the downward trend in home sales seems to have reasserted itself after a brief uptick last fall.
These latest NAR numbers, which show a continuing decline in pending home sales as well as a downward revision from the last report, only serve to confirm what’s been said many times before: that we are still months away from a recovery in the real estate housing market.
The pending-sales index reports contracts signed, but not closed, and the value of the index lies in its forward-looking predictive ability to forecast existing home sales. Existing home sales represent the bulk of the market.
Real estate investors should take the lastest NAR figures as a sign that the downward pressure on prices will continue, and that a rebound in the short-term is highly unlikely. Still, tremendous opportunities abound on individual properties for the motivated investor willing to find them.
Photo: UP or DOWN / BLACK or WHITE, originally uploaded by Luichi74.