The pending sales of previously owned homes unexpectedly rose 5.2% in July -- an increase that may be a sign of housing sector stabilization or may merely reflect an elongated impact of the home-buyer tax credit, due to an extended closing deadline.

Congress extended the home closing deadline to Sept. 30, 2010 from June 30, 2010. That means those who purchased homes by the home-buyer tax credit deadline of April 30 have three additional months to close on the transaction. This move may have "elongated" or drawn-out the stimulus effect, in this case pushing July's pending sales total higher.

A Bloomberg survey had expected pending sales of homes to dip 1% in July after falling 2.6% in June. Pending home sales are now 19.1% lower than a year ago, in July 2009.

Pending home resales increased in every region in July, rising 6.3% in the Northeast, 4.1% in the Midwest, 1.2% in the South, and 11.6% in the West.

Housing Sector Recovery: A Long Process


Despite July's pending sales rise, Lawrence Yun, chief economist with the National Association of Realtors, cautioned that the U.S. housing sector's recovery would be a long process.

"Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery," Yun said in a statement. "But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers."

In general, economists view new and existing home sales statistics as more-accurate indicators of housing sector activity than pending home sales, due to the number of pending sales that fall through, as a result of mortgage problems, title issues, liens, and other complications that sometimes prevent signed housing contracts from being finalized.

July's pending sales rise does not blot out the fact that both new and existing home sales declined this summer -- trends that indicate the housing market retrenched, following the end of the home-buyer tax credit. Further, that sales decline has swelled inventories to very high levels: a 9.1-month supply of new homes and a 12.5-month supply of existing homes, at their respective, current sales paces. A normal, healthy home sale market has a roughly three- to five-month supply of each. The U.S. economy will have to register impressive job growth over many quarters to return home inventories to normal levels.

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Penny Jim

What in the world is going on with housing? All the insanity and incompetency in the banking industry and government is getting worse. The second bubble is about to expand and burst. Homes are a rip off and if you still believe they are an investment in your future you need to get informed. Owning a home today is not what it once was. Todaya it is a way to get a larger tax base for the local, state and federal government.

September 03 2010 at 12:06 PM Report abuse rate up rate down Reply
rjmmillis

Wait 15 minutes, and the housing will be down for July

September 03 2010 at 10:08 AM Report abuse rate up rate down Reply
Dismayed

Keep your eyes on the prize: Throw the bums out. Reduce your tax footprint and save. Start to turn off the open line to your money that these spend-and-tax idiot politicians in DC depend on.

September 03 2010 at 8:55 AM Report abuse +2 rate up rate down Reply
doodlewhopper12

We the people have been bombarded with so many skewed figures about a recovery and improvement in the economy, that it feels like a foreign country that i"m living in...... I only know what i see all around me.....no jobs and no money....I ask people who could hire and those that used to hire and they tell me that it is too expensive to hire a person....they say the federal government is causing them to pay excessive taxes when they hire. If that's why people don't hire anymore, then looks to me like the government has killed the goose that laid the golden egg....... I do not believe that new sales have increased over 5%.

September 03 2010 at 8:02 AM Report abuse +3 rate up rate down Reply
wavby

cgino makes an interesting point concerning the great news / terrible news... however, i believe we're talking apples and grapefruits here. one figure is year over year sales and the other figure is month by month sales. you can spin it however you like; the market is awful and getting worse quickly without massive intervention. intervention that will prolong the agony of propping up inflated prices and underwater homeowners.

September 03 2010 at 7:19 AM Report abuse rate up rate down Reply
Robin

yeah you Libs, like this fact from good ol' W.: "OB GYNs are unable to practice their love with women." If you Libs don't like these types of facts, then you ain't livin' in reality. go find Alice!! --since you probably aren't a medical doctor and you don't need to be to see Alice.

September 03 2010 at 2:50 AM Report abuse -2 rate up rate down Reply
vobox3343

Bwana President Obama

September 03 2010 at 2:29 AM Report abuse -2 rate up rate down Reply
vobox3343

Republicans should be elated, remember? Bush economic policies are still in effect. Why aren't you happy?

September 03 2010 at 2:27 AM Report abuse -1 rate up rate down Reply
throwin90

They are just making this **** up. Don't buy any real estate until it goes down 50% more. I have never seen such a pooooor market. Only suckers are buying in this market. THINGS SUCK IN THE HOUSING MARKET.

September 02 2010 at 9:39 PM Report abuse +2 rate up rate down Reply
cgino

Is it me or did the gov just release housing figures less than a week ago saying the housing maket was down to the point of being the worst in 28 years? How can they now tell us things are doing great? Does it have something to do with dems having a neg. 70% rating in the election poles? It sounds like the gov is trying to conn us into buying houses when they damn well know things are lousy! Don't buy into this dog and pony bait and switch reporting! In Va Beach, I have a fairly new condo in the ocean front area with water views and haven't had one serious buyer look at it in almost three months. It has lost 25% of it's value when normally it would be selling at a premium. Hell I can't even rent the damn thing at a loss but yet Obama and cronies would like me to believe things are getting better and now is the time to buy. YEAH RIGHT! It has gotten so bad that investors have stopped buying foreclosed properties unless they can buy them for 55 cents on the dollar but oh yeah, things are looking much better in July! What a crock of crap!

September 02 2010 at 9:13 PM Report abuse +3 rate up rate down Reply