U.S. pending home sales rise 6.7% in April

The number of U.S. homebuyers who agreed to purchase a previously occupied home in April posted the largest monthly jump in nearly eight years, a sign that sales are finally coming to life after a long and painful slump. The National Association of Realtors says its seasonally adjusted index of sales contracts signed in April surged 6.7% to 90.3, far exceeding analysts’ forecasts. It was the biggest monthly jump since October 2001, when pending sales rose 9.2%. “This is yet another positive indication that the bottoming process is forming,” Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. “Now if only prices would stabilize.” Economists surveyed by Thomson Reuters expected the index would edge up to 85 from a reading of 84.6 in March. Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future existing home sales. The index was 3.2% above last year’s levels and has risen for three straight months after hitting a record low in January. A nearly 33% sales increase in the Northeast and a 9.8% jump in the Midwest led the overall surge. Sales contracts rose 1.8% in April from a month earlier in the West, but fell 0.2% in the South.