The number of consumers who signed contracts to buy homes rose in August for the second consecutive month, but remained far below last year's pace, according to figures released Monday by the National Association of Realtors.
Even though mortgage rates are at historic lows, consumers will not commit to buying new homes because of major concerns about the job market and housing values.
Mortgage bankers said that in some cases homebuyers are still waiting, expecting further declines in prices during the fourth quarter and into next year.
NAR said that its seasonally adjusted index of sales agreements for previously occupied homes rose 4.3% to a reading of 82.3 — 20% below the pace set in August of 2009.
A reading of 100 indicates the average level of sales activity in 2001, when the index was created by NAR. The reading was above that threshold from early 2003 through April 2007.
Barclays Capital said the index reading rose more than it expected, saying, "We see this number as providing further evidence that housing activity is stabilizing after the large drop-off in activity following the expiration of government stimulus."
It added that, "Since the majority of pending home sales go to settlement in two to three months, the August reading suggests the potential for some improvement in home sales in the coming months."
Geographically, three of the four regions experienced gains, led by the South (6.7%) and West (6.4%), while the Northeast experienced a decline of (2.9%).
