April Pending Home Sales Rise 6.3%

The NAR said its index of sales contracts totaled 88.2, up from 83 in March but down 13.1% from a year ago.
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New data Monday showed a surprising 6.3% rise in pending home sales in April, but homebuilder stocks barely budged on the news.

The National Association of Realtors said its index of sales contracts totaled 88.2 in April, up from 83 in March. The index was down 13.1% from a year ago. This was the highest index reading since October 2007.

Homebuilder stocks such as

Toll Brothers

(TOL) - Get Report

,

Lennar

(LEN) - Get Report

and

KB Home

(KBH) - Get Report

were all trading in slightly negative territory Monday. The

SPDR S&P Homebuilders

(XHB) - Get Report

, an exchange-traded fund that tracks the sector, was down 1.6% at $18.51.

Lawrence Yun, NAR's chief economist and a perennial optimist, said pending sales contracts have picked up notably in areas undergoing significant price drops.

"Bargain hunters have entered the market en masse, especially in areas that have experienced double-digit price declines, but it's unclear if they are investors or owner-occupants," he said. "Sharp price reductions are leading to a quicker discovery of price equilibrium points. The West is already seeing year-over-year gains in pending contracts."