From the WSJ:
The number of U.S. home buyers who signed contracts to buy existing homes unexpectedly fell in April to the lowest level in four months. The news is a setback for the residential market, but not enough to raise alarms that the nascent housing recovery is stalling.
The National Association of Realtors, the sector’s main trade group, said Wednesday its seasonally adjusted index for pending sales of existing homes decreased 5.5% on a monthly basis to 95.5, the weakest showing since December. The results, however, were 14.4% above the same month a year earlier.
“Home contract activity has been above year-ago levels now for 12 consecutive months,” Lawrence Yun, the Realtors’ ever-optimistic chief economist, said in the report. “The housing recovery momentum continues.”
Pending sales fell in three out four U.S. regions in April compared with a month earlier. They tumbled 12% in the West, 6.8% in the South and 0.3% in the Midwest. They inched up 0.9% in the Northeast.
Despite the decline, recent data show the housing market is starting to get back on track after a collapse in prices that began nearly six years ago, though the market remains under severe distress in some parts of the country. (Today, we detail how Atlanta remains in pain.)
Here’s what industry watchers had to say:
Peter Newland, economist, Barclays Research: “This likely reflects payback following three months of solid gains, in particular the 3.8% jump in March.”
Stephen East, builder analyst, ISI Homebuilding Research: “We believe shrinking inventory is responsible in large part for weakness in today’s … metric. Conversely, lower existing inventories are a positive for new home sales.”
Dan Oppenheim, builder analyst, Credit Suisse: “We think the tight supply of distress in some key markets is holding back sales (the West fell a sharp 12% and the South fell 6.8%, both of which have many foreclosure-heavy markets).”
The number of Americans signing contracts to buy previously owned homes fell in April by the most in a year, indicating the U.S. housing recovery remains uneven.
The index of pending home resales dropped 5.5 percent following a revised 3.8 percent gain the prior month, figures from the National Association of Realtors showed today in Washington. The median forecast of 42 economists surveyed by Bloomberg News called for no change in the measure.
“The pattern of demand is sluggish and volatile,” said Yelena Shulyatyeva, a U.S. economist at BNP Paribas in New York, who projected a decline. “Until the supply issue is resolved, we could see further declines in prices and the housing market will continue to hover around the bottom. It’ll be a gradual improvement, we don’t expect anything stronger than that.”
Three of four regions saw a decrease, today’s report showed. That included a 12 percent slump in the West and a 6.8 percent decline in the South. Pending purchases rose in the Northeast.
Compared with a year earlier, the index climbed 14.7 percent after a 10.5 percent gain in the prior 12-month period.