07 August 2008 17:54 [Source: ICIS news]
HOUSTON (ICIS news)--Sales of existing homes in the US should improve in the months ahead with broader gains in the fourth quarter of 2008, according to the National Association of Realtors (NAR) on Thursday.
The NAR’s Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 5.3% to 89.0 from a downwardly revised reading of 84.5 in May, but remains 12.3% below June 2007 when it stood at 101.4.
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However, existing home sales serve as a barometer for new home construction since an oversupply of existing homes and associated depressed home values can tend to discourage building activity.
The NAR attributed its outlook to new provisions for a tax credit available to first-time home buyers included in the recently passed housing stimulus bill.
Lawrence Yun, NAR chief economist, said sales have been in a pattern of rising and falling within a fairly narrow range.
“The vacillation of data from one month to the next indicates a housing market in transition,” he said.
“The rise in pending home sales was broad-based with all four regions showing gains. This is welcome news because a rise in contract activity is necessary for an overall housing recovery.”
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