Pending Home Sales Down - Foreclosures & Delinquences Drop

Pending home sales fell substantially in April with unusual weather and continued economic softness hindering a recovery in the housing market, according to the National Association of Realtors.

The trade association, which has more than 1.2 million members, said its pending home sales index, which is based on contracts signed, decreased 11.6% to 81.9 for April from a downwardly revised 92.6 for March. NAR said the index is 26.5% lower than 111.5 for the year-earlier April, when homebuyers where rushing to qualify for the expiring federal tax credit.

Meanwhile, Foreclosure starts and delinquencies dropped significantly from a year ago, according to Lender Processing Services' (LPS: 26.03 0.00%) Mortgage Monitor report.

Servicers started 187,423 foreclosures in April, down 14.7% from a year ago and down 31% from March.

Total delinquencies, at 7.97%, are down 16.3% from a year ago but up 2.4% from March, according to the report.

Still, more mortgages are seriously delinquent when compared to prior years. In January 2009, just 10% of delinquent mortgages were in the 12 months or more delinquent bucket.

NAR chief economist Lawrence Yun said, "Even with very favorable affordability conditions, job growth and a pent-up demand from abnormally low household formation during the past three years, the recovery will continue to be uneven and sluggish given the ongoing credit constraints."