TAMPA - A pending sales index shows 7.1 percent fewer home buyers in the South signed sales contracts to purchase existing homes in May than in April. It was the largest regional drop, according to a report released today by the National Association of Realtors.
The index for the South also hit a new low, said Mike Larson an analyst with Weiss Research in Jupiter. It was a disappointment, he said, because, "the housing market had a bit of bounce in April because of moves made by the Feds to lower interest rates.
Nationwide, the index fell 4.7 percent, after a 7.1 percent gain in April.
Pending resales fell 6 percent in the Midwest, 2.9 percent in the Northeast and 1.3 percent in the West.
The nationwide fall was lower than economists had projected. Larson attributed the declines to overall economic conditions.
"Up until late 2007, early 2008, the housing problem was housing specific," he said. "It was a private recession. Now, household budgets are being squeezed, which hurts housing more."
The pending home resales report is considered a leading indicator because it tracks contract signings.
It will be a couple of months before it's clear whether the pending sales turn into actual sales. It typically takes a month or two before pending transactions are completed. The national and local associations of real estate agents release existing home sales monthly and the data lags behind by a month. This month's report is expected to be released on July 24.
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