Pending home sales surge 6.7% in April
* Pending sales jumped 6.7% in April. That compared with forecasts for a 0.5% gain and it comes on the heels of a 3.2% rise in March. In fact, it's the biggest monthly gain since October 2001.
* The pending sales index, at 90.3, is the highest since September 2008 (90.9). It gained 3.2% year-over-year.
* Regionally, pending sales rose in three out of four areas. They gained 1.8% in the West, 9.8% in the Midwest and a hefty 32.6% in the Northeast. Sales dipped 0.2% in the South.
Pending sales of existing homes turned in a very respectable performance this April. The monthly gain was the single-largest in more than seven years, led by a hefty 33% pop in the Northeast. What's going on? Some buyers latched on to lower home prices, lower mortgage rates, and tax breaks as reasons to get to work again in the housing market.
Still, the large pop in pending sales of used homes contrasts sharply with the lackluster 0.3% rise in new home sales. That suggests deeply discounted used homes are providing stiff competition for home builders, and gaining market share at their expense. More importantly, mortgage rates are now starting to rise sharply. This could put a damper on sales as we head into the summer. Bottom line: Conditions have improved in the housing market, but it's certainly not all smooth sailing ahead.