WASHINGTON, D.C. - The number of buyers who signed contracts to purchase previously occupied homes increased in July but remained well below last year's levels, a sign that demand for housing remains weak.
The National Association of Realtors said Thursday its seasonally adjusted index rose 5.2 percent from a month earlier to a reading of 79.4. Economists surveyed by Thomson Reuters had expected the index would fall to 74.9.
The index was still down 19 percent from the same month last year. June's reading was the lowest on records dating to 2001. It was revised slightly downward to 75.5.
The index provides an early measurement of sales activity because there is usually a one- to two-month lag between a sales contract and a completed deal.
High unemployment, weak job growth and tight credit have hurt the housing market. Sales picked up in the spring when the government was offering tax credits of up to $8,000. However, once the tax credits expired on April 30, sales plunged.
"The recovery looks to be a long process, " Lawrence Yun, the Realtors' chief economist, said in a statement. "For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity."
The sales report was driven by a nearly 12 percent jump in the West and a more than 6 percent increase in the Northeast. Sales were up 4 percent in the Midwest and about 1 percent in the South.
Though mortgage rates have been at or near the lowest level in decades, the economy remains weak. Plus, many buyers have been scared away by the prospect that home prices could start to turn downward again -- something that most analysts expect.
The index tracks signed sales contracts for previously occupied homes. A reading of 100 is equal to the average level of sales activity in 2001, when the index started.
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