The number of Americans who signed contracts to buy previously owned homes rose last month to reach the highest level since April 2010, according to data released Thursday by the National Association of Realtors. The uptick was driven largely by falling home prices and low interest rates.
NAR's index of sales agreements climbed 7.3 percent last month to reach 100.1 points, after rising by 10.4 percent in the previous month. The report may also reflect stabilization in the construction sector, which has suffered more than 2 million job losses since the recession began. "Housing affordability conditions are at a record high and there is a pent-up demand from buyers who've been on the sidelines, but contract failures have been running unusually high," NAR chief economist Lawrence Yun told Bloomberg. "Some of the increase in pending sales appears to be from buyers recommitting after an initial contract ran into problems, often with the mortgage." Some analysts still expect another wave of foreclosures to hit the market. To cushion themselves from excessive risk, lenders should employ resident screening services
, background checks and credit reports
to inform their mortgage credit decisions