Pending home sales fell substantially in April with unusual weather and continued economic softness hindering a recovery in the housing market, according to the National Association of Realtors.
The trade association, which has more than 1.2 million members, said its pending home sales index, which is based on contracts signed, decreased 11.6% to 81.9 for April from a downwardly revised 92.6 for March. NAR said the index is 26.5% lower than 111.5 for the year-earlier April, when homebuyers where rushing to qualify for the expiring federal tax credit.
Meanwhile, Foreclosure starts and delinquencies dropped significantly from a year ago, according to Lender Processing Services’ (LPS: 26.03 0.00%) Mortgage Monitor report.
Servicers started 187,423 foreclosures in April, down 14.7% from a year ago and down 31% from March.
Total delinquencies, at 7.97%, are down 16.3% from a year ago but up 2.4% from March, according to the report.
Still, more mortgages are seriously delinquent when compared to prior years. In January 2009, just 10% of delinquent mortgages were in the 12 months or more delinquent bucket.
NAR chief economist Lawrence Yun said, “Even with very favorable affordability conditions, job growth and a pent-up demand from abnormally low household formation during the past three years, the recovery will continue to be uneven and sluggish given the ongoing credit constraints.”
Driven by continued high levels of unemployment across many parts of the country, data from RealtyTrac shows foreclosure activity increased in many cities during last year, despite the fact that many lenders halted their foreclosure process for part of the year.
According to the report, foreclosures increased in 149 of the 206 largest cities in the country, with Houston and Seattle showing the sharpest increase from 2009 to 2010. Las Vegas continued to have the highest foreclosure rate in the country during 2010, even though activity there, along with each of the 10 hardest-hit cities, showed declines compared to 2009.
“Foreclosure floodwaters receded somewhat in 2010 in the nation’s hardest-hit housing markets,” according to James J. Saccacio, chief executive officer of RealtyTrac. “Even so, foreclosure levels remained five to 10 times higher than historic norms in most of those hard-hit markets.”
Nationwide last year, more than 2.8 million properties received foreclosure filings, accounting for roughly 2.2 percent of all homes.
However, the number of foreclosed properties may also provide opportunities for many buyers. According to the National Association of Realtors, distressed homes made up 36 percent of all existing-home sales in December.