an article from Globe and Mail

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Alan Zibel

, G3 o/ p' ?* H1 W6 o" D1 X. @Washington — The Associated Press, Tuesday, Jun. 02, 2009 11:05AM EDT

The number of U.S. home buyers 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 said Tuesday its seasonally adjusted index of sales contracts signed in April surged 6.7 per cent to 90.3, far exceeding analysts' forecasts. It was the biggest monthly jump since October 2001, when pending sales rose 9.2 per cent.
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9 e6 {9 R! w) T5 U, u9 t“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.”

& ~, t1 ?8 ^7 p! r( tEconomists 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.
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“The pronounced increase in April does indicate that actual existing home sales are poised to rise in the coming month or two,” wrote Joshua Shapiro, chief U.S. economist with MFR Inc.
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The index was 3.2 per cent above last year's levels and has risen for three straight months after hitting a record low in January. A nearly 33 per cent sales increase in the Northeast and a 9.8 per cent jump in the Midwest led the overall surge. Sales contracts rose 1.8 per cent in April from a month earlier in the West, but fell 0.2 per cent in the South.

The big boost likely reflects the impact of a new $8,000 (U.S.) tax credit for first-time home buyers that was included in the economic stimulus bill signed by President Barack Obama in February. Since buyers need to finish their purchases by Nov. 30 to claim the credit, “we expect greater activity in the months ahead,” Lawrence Yun, the Realtors' chief economist, said in a statement.

$ [( x5 ]) y4 g+ M0 L9 }9 KStill, Mr. Yun cautioned that the pending sales data is more volatile than in the past because many sellers need banks to agree to take less than the original mortgage – a so-called “short sale.” That process is often difficult, time-consuming and can wind up falling apart before the deal closes.
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The Federal Housing Administration last week released details of a plan in which borrowers who use FHA loans can get advances from lenders that let them effectively receive the credit in advance, so they don't have to wait to get the money from the Internal Revenue Service.

1 x7 C4 Y- [' b. |/ KCompleted home sales rose 2.9 per cent to an annual rate of 4.68 million in April from a downwardly revised pace of 4.55 million in March, the Realtors' group said last week.
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$ w. H7 ~% Z7 }3 p( f8 MSales of inexpensive foreclosures and other distressed low-end properties have even sparked bidding wars in places like Las Vegas, Phoenix and Miami. But the market for high-end properties remains at a virtual standstill.

/ @( z4 c* Q: k3 ], f7 uThe national median sales price in April plunged more than 15 per cent to $170,200, from $201,300 in the same month last year. That was the second largest yearly price drop on record, according to the Realtors' group.