My Indiana Home Blog

Pending home sales rise 6.7 percent in April. Biggest monthly jump in more than seven years signally end of the housing slump.

The number of homebuyers who agreed to purchase a previously occupied home in April posted the largest monthly jump in more than seven years last month. The National Association of Realtors said its seasonally adjusted index of sales contracts signed in April surged 6.7 percent to 90.3, exceeding the forecasted results.

This is another positive indictation of the bottoming process. Now prices might start to stabilize. The index was 30.2 percent above last year's levels and has risen for three straight months after hitting a record low in January. A 9.8 percent jump in the Midwest help to lead the surge.

The boost was probably because of the new $8,000 tax credit for first-time homebuyers that was part of the stimulus package signed by President Obama in February. Buyers need to finish their purchase by November 30 to claim the credit. Many realtor's are expecting to see another jump in activity in the following months too.

Pending sales data is more volatile than in the past because many sellers need banks to agree to take less than the original mortgage in something called a "short sale."

The Federal Housing Administration released details of a plan in which borrowers who use FHA loans can get advances from lenders that let them effectively receive the credit in advnace, so they don't have to wait to get money fromt he Internal Revenue Service.