For the third month in a row, pending home sales went up again this April. Many are wondering if the prolonged turn in an appreciating direction has marked the bottom of the market (we’ll keep our fingers crossed!). The numbers, released by the National Association of Realtors (NAR), are a positive sign for the housing market – and really for the whole economy. Nationwide the Pending Home Sales Index increased 6.7 percent from the previous month (the biggest spike in almost 8 years) and it went up 9.8 percent in the Midwest, which is over 11 percent higher than April of last year.
Statistics aside, Chicago real estate agents are seeing a definite uptick in action among buyers. And not just casual buyers, but serious ready-to-purchase-today buyers. NAR Chief Economist Lawrence Yun has partially attributed an increase in activity to the $8,000 first time home buyer tax credit. The substantial credit is a great incentive for buyers to purchase before December, 1 (when the program expires). Yun says he expects more and more buyers to take advantage of the credit as the deadline draws closer. He also thinks the jump in first time home buyer purchases will provoke more repeat buyers to come down off the fence as well.
Data for May’s pending home sales will be released later this month. Will it show the fourth consecutive rise, further bolstering the possibility of a market upturn? It certainly seems so. Either way, there is still a very large supply of unsold homes that’s contributing to lower prices. But new buyers are chipping away at the inventory and creating a little light at the end of the tunnel.