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Date: 10/8/2008
Authors: Timothy R. Homan

News Bite

U.S. Pending Home Resales Rise 7.4% as Prices Drop

The index of pending home resales rose 7.4 percent in August, the most since October 2001, after falling 2.7 percent in July, according to a new report from the National Association of Realtors. The increase is the fourth so far this year and up 8.8 percent from August 2007.

Economists had projected the index would fall 1.3 percent, according to the median of 38 forecasts in a Bloomberg News survey. Estimates ranged from a drop of 3.2 percent to a 4 percent gain.

All four regions saw pending sales increase from July. The West, an area where foreclosures are particularly prevalent, saw the biggest rise in pending sales with an 18.4 percent jump. Resales climbed 8.4 percent in the Northeast, 3.6 percent in the Midwest and 2.3 percent in the South. Compared with a year ago, pending resales were up in all regions except the South.

Pending resales are considered a leading indicator because they track contract signings. Closings, which typically occur a month or two later, are tallied in a separate report from the Realtors. The group's figures on September existing home sales are due Oct. 24. Purchases in August fell 2.2 percent to a 4.91 million annual pace from a 5 million rate the prior month.

The number of previously owned homes on the market at the end of August represented 10.4 months' worth at the current sales pace, down from 10.9 months the prior month, NAR said on Sept. 24. A five to six months' supply reflects a stable market, the group has said.

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