Lower property prices drive rise in pending home resales
Pending sales of previously owned homes unexpectedly rose in June as buyers swept up foreclosed and lower-priced properties.
The index of pending home resales rose 5.3% after a revised 4.9% decline in May, the National Assn. of Realtors said Thursday in Washington. A separate report showed that claims for jobless benefits jumped last week to a six-year high.
The record number of foreclosures has forced property values down enough to stir interest among buyers, helping to stabilize the market. Still, repossessions may keep mounting as stricter lending rules make it harder for owners to refinance, economists said.
“What we’re getting is a little bit of foreclosures thrown in with voluntary home sales,” said John Silvia, chief economist at Wachovia Corp. in Charlotte, N.C. “There seems to be enough of a price decline that buyers are starting to look for bargains.”
The measure increased in all four regions of the country from May, led by a 9.3% gain in the South. Purchase contracts also rose 4.6% in the West, 3.4% in the Northeast and 1.3% in the Midwest.
Compared with a year ago, contract signings remained down in all regions.
A separate report from the Labor Department showed that initial jobless benefit claims increased by 7,000, to 455,000, the most since March 2002.