WASHINGTON (MarketWatch) -- Pending sales of existing homes rose for the third month in a row in April, boosted by record-low mortgage rates and special incentives for first-time buyers, a real estate trade group reported Tuesday. The pending home sales index for April rose 6.7% after a 3.2% increase in March, the National Association of Realtors said. The index, based on sales contracts on existing homes, was 3.2% above April 2008.
With mortgage rates hovering near all-time lows, housing affordability has improved, said Lawrence Yun, chief economist for the NAR. Yun expects existing-home sales to rise about 17% by the end of the year to a seasonally adjusted annual rate of 5.48 million.
MP: A separate report on housing affordability recently released by the National Association of Realtors indicates that housing affordability remains at near-record levels (see chart above). In April, the Housing Affordability Index (HAI) increased to 174.8, up almost three full points from 171.9 in March, largely because of historically low mortgage rates of 4.96% (April average) and stable home prices and income levels. Except for the 176.9 index reading in January, April's affordability measure of 174.8 was at an all-time, historic record high.
An HAI of 174.8 would mean that the typical household earning the median family annual income of $60,927 in April would have 174.8% of the standard qualifying income level of $38,848 required to purchase a median-priced existing single-family house ($169,800) with a 20% down payment, financing the remaining 80% of the sales price with a 30-year fixed rate mortgage at the April average of 4.96% (monthly payment of $726 for principal and interest).
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