Contract signings of existing homes rose 8.2% m/o/m in May, well above expectations of a gain of 3% and compares with an 11.3% drop in April. All 4 regions saw gains led by a 12.9% jump in the West, the region most associated with foreclosures. While a positive data point relative to expectations, the index is still at the 2nd lowest level since last Nov and we need to see how many of these contracts turn into closings as bank mortgage approval has become a much tougher process. Another factor in whether things close that the NAR is pointing out today is related to HUD. The NAR says, “a nonsensical situation has developed recently in some states with HUD unable to complete foreclosure deals because of insufficient funds to pay attorney fees at closing, even with buyers offering the full listing price.” Point being, the home buying process is tough with no signs it will ease up soon and add this on top of an already difficult jobs market which is the key factor in whether someone decides to buy a home.
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