Pending home sales unexpectedly rise 6.3%, NAR says

Pending sales of existing homes in April 2008 rose 6.3%, to a seasonally-adjusted annualized rate of 4.89 million, the National Association of Realtors announced Monday. A pending sale is one in which a contract was signed on an existing home, but not yet closed.

Economists surveyed by Bloomberg News had expected April pending home sales to fall 0.4%. The NAR said its pending home sales index rose 6.3% to 88.2, its highest level in six months. The pending homes sales index fell in March and February.

However, even with Monday's surprising April statistic, pending home sales are still down 13% from April 2007.

Economist Peter Dawson said home buyers / sellers should not conclude that the U.S. housing market is in recovery "until both sales and median prices rise for several consecutive months" across the United States.

Pending home sales varied by region. Sales rose 13% in the Midwest, 8.3% in the West, and 4.6% in South; sales fell 1.9% in the Northeast.

Economic Analysis: A surprisingly positive April existing home sales report. Still, as economist Dawson outlined, economists underscore that one shouldn't read too much into one monthly statistic, given it's a short snapshot of housing conditions, and due to likely revisions. One should also evaluate the April number in the context of the long and wide U.S. housing downtrend: sales had fallen so low that any uptick would register an increase, and that may very well have been the case in April, particularly if the existing home segment registers decreases for May, June, July, and August -- prime selling / family relocation months in the United States.