Pending home sales drop signals continued delays

July 27th, 2012

Pending home sales have slipped.

While the U.S. real estate market continues to show slow improvements, slightly negative results in pending sales transactions show that there continued to be issues in the home sale process, putting an emphasis on adequate lead time for any executive mortgage services.

A report from the National Association of Realtors found that the pace of pending home sales dropped 1.4 percent from May to June this year to a mark of 99.3. Even though that also signifies a 9.5 percent gain compared to June 2011, the monthly drop took some analysts by surprise.

NAR economists said that it was another sign of the continuing unsteadiness regarding home closings, partially due to low mortgage rates, which have been considered a positive for the market.

"With record low mortgage interest rates, there has been a surge of refinancing on top of a higher level of home purchases, which has been creating delays recently in the closing process," commented Lawrence Yun, NAR chief economist.

Recent trends in mortgage volume support the idea of some traditional mortgage lenders becoming overwhelmed by applications. For the week ending July 20, the Mortgage Bankers Association said its volume of refinance applications was at its highest level since April 2009.