U.S. Pending Home Sales Rise 0.4% In April, Less Than Expected

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Pending home sales in the U.S. increased for the second consecutive month in April, according to a report released by the National Association of Realtors on Thursday, although pending sales rose by much less than economists had anticipated.

NAR said its pending home sales index rose 0.4 percent to 97.8 in April after jumping 3.4 percent to 97.4 in March. Economists had expected the index to climb by 1.0 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Despite the modest monthly increase, NAR noted that the pending home sales index is down by 9.2 percent compared to a reading of 107.7 in April of 2013.

Predicting a gradual uptrend in home sales, Lawrence Yun, NAR chief economist, said, "Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective home buyers' confidence."

"An uptrend in closed sales is expected, although some months will encounter a modest setback," he added.

The modest increase in pending home sales was partly due to a jump in the Midwest, where pending sales surged up by 5.0 percent.

Pending home sales in the Northeast also edged up by 0.6 percent, while pending sales in the West dropped by 2.9 percent and pending sales in the South slipped 0.6 percent.

Citing sub-par activity in the first quarter, NAR said annual existing-home sales in 2014 are expected to be modestly below the nearly 5.1 million in 2013.

The national median existing-home price is projected to grow between 5 and 6 percent this year and in the range of 4 to 5 percent in 2015, NAR added.

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