U.S. pending home sales in June unexpectedly rose, though the number of home-sale contracts were well below the year-ago level, a real-estate trade group said Thursday. The National Association of Realtors (NAR) said its pending home sales index, based on contracts signed in June, was up 5.3 percent to 89.0 from 84.5 in May. June's level, while being the highest since last October, was still 12 percent below year-ago levels. Some analysts said the main reason for the June improvement might be that banks were aggressively discounting prices on foreclosed properties. But even that would be a sign that housing markets are being brought into order. Last month, NAR said completed sales of existing homes fell more sharply than expected in June, pushing activity down to the lowest level in more than a decade. Many analysts expect home prices will keep falling until at least next spring as tighter credit, a weaker job market, and rising foreclosures scare away potential buyers. However, NAR believes a package of housing legislation signed by President George W. Bush last week—particularly a $7,500 tax credit for first-time homebuyers—will aid a housing recovery. “With a tax credit now available to first-time home buyers, increases in home sales could be sustained, with the momentum carrying into 2009,” NAR chief economist Lawrence Yun said.
