Pending home resales climbed in June
Pending sales of previously owned homes unexpectedly rose in June as buyers swept up foreclosed and lower-priced properties.
The index of pending home resales rose 5.3% after a revised 4.9% decline in May, the National Assn. of Realtors said today in Washington. Other reports showed claims for jobless benefits jumped last week to a six-year high and consumer borrowing surged in June.
The most foreclosures on record have forced property values down enough to stir interest among buyers, helping to stabilize the market. Still, repossessions may keep mounting as stricter lending rules make it harder for owners to refinance their mortgages, economists said.
"What we're getting is a little bit of foreclosures thrown in with voluntary home sales," said John Silvia, chief economist at Wachovia Corp. in Charlotte, N.C. "There seems to be enough of a price decline that buyers are starting to look for bargains."
The measure increased in all four regions of the country from May, led by a 9.3% gain in the South. Purchase contracts also rose 4.6% in the West, 3.4% in the Northeast and 1.3% in the Midwest. Compared with a year ago, contract signings remained down in all four regions.
Sales "have been consistently strong" in cities such as Sacramento, Las Vegas and Ft. Myers, Florida, according to the report. The increases are also broadening to more "affordable" markets like Columbus, Ohio, and Charleston, West Virginia, the group said.
A separate report from the Labor Department showed initial jobless claims increased by 7,000 to 455,000, the most since March 2002.
Consumer credit rose by $14.3 billion in June, the most since November, to $2.59 trillion, the Federal Reserve also said. The jump in borrowing was more than twice as much as economists forecast as declining home equity forced Americans to fund purchases with credit cards and other loans.
