WASHINGTON – More Americans signed contracts to buy homes in March, but sales were uneven across the country and were not enough to signal a rebound in the housing market.
Sales agreements for homes rose 5.1 percent last month to a reading of 94.1, according to the National Association of Realtors' pending home sales index released Thursday.
Signings are about 24 percent above June's index reading, the low point since the housing bust. Still, the index is below 100, which is considered a healthy level. The last time it reached that point was in April, the final month people could qualify for a federal home-buying tax credit of up to $8,000.
"Home sales are trying to find their fundamental level, unaffected by government stimulus programs that appear to have shifted the timing of home purchases but do not appear to have noticeably affected the level of home sales," said Steven A. Wood, chief economist at Insight Economics.
Contract signings are usually a good indicator of where the housing market is heading. That's because there's usually a one- to two-month lag between a sales contract and a completed deal. About 80 percent of contract signings turn into actual home sales within two months, said Yelena Shulyatyeva, an analyst at BNP Paribas.
But the Realtors group has noted in past months "a measurable level of contract cancellations." Many buyers have canceled purchases after appraisals showed the properties were valued much lower than their initial bids. A final sale is not final until a mortgage is closed.
The pace of sales varied from region to region. The index rose 10.3 in the South, 3.1 percent in the West and 3 percent in the Midwest. It fell 3.2 percent in the Northeast.
High unemployment and strict lending standards are preventing some people from buying homes. A rising number of foreclosures forcing down home prices, leaving would-be buyers concerned that the market has yet to reach bottom.
Economists say it will be years before the housing sector recovers. Sales of previously occupied homes fell last year to its lowest level in 13 years. Americans are on track to buy fewer new homes this year than in any year since the government began keeping data almost a half-century ago. Sales are now just half the pace of 1963 — even though there are 120 million more people living in the United States today.