Pending Home Sales Tick Up
The National Association of Realtors reported on Thursday that pending home sales increased 2.4 percent from May to June, and are close to 20 percent higher than year-ago levels, but a recent uptick in cancellations is limiting the enthusiasm over the report.
Agents say that the rise in cancellations is due to buyers' nervousness over the ongoing debt-limit drama, forcing already nervous potential buyers to back out at the last minute because of the onslaught of rhetoric from all sides about the possible consequences should an agreement on the issue not be reached.
NAR chief economist Lawrence Yun tried to downplay the rise in cancellations, saying they may be nothing more than delayed buying decisions. The process of obtaining financing and getting an appraisal are taking longer than before, as well, as underwriting restrictions have been toughened in the wake of the ongoing foreclosure crisis.
Another factor having a major impact on closing times is a significant boost in short sales, when a lender allows a borrower to sell their home for less than what they owe on the loan. These deals typically take longer to close and often run into impassable hurdles that prevent deals from closing.
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