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May 26, 11:23 AM EDT

Pending US home sales hit highest level since February '06


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AP Photo/Elise Amendola

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WASHINGTON (AP) -- Americans signed more contracts to buy homes in April for the third straight month, driving pending home sales to the highest level in more than a decade.

The National Association of Realtors said Thursday that its seasonally adjusted pending home sales index surged 5.1 percent last month to 116.3, the highest since 117.4 in February 2006.

The April numbers are the latest example of good news for the housing industry, which is in the middle of the spring home-buying season. Pending home sales are up 4.6 percent from a year ago.

Sales climbed 11.4 percent last month in the West, 6.8 percent in the South and 1.2 percent in the Northeast. In the Midwest, sales dipped 0.6 percent.

Lawrence Yun, NAR chief economist, credited long-term mortgage rates that remain below 4 percent and steady job growth, which gives consumers the incomes and confidence to buy homes.

Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed.

The Commerce Department reported Tuesday that new home sales shot up 16.6 percent last month to a seasonally adjusted rate of 619,000, the most since January 2008. Sales of existing homes, which make up 90 percent of the housing market, rose in April for a second straight month to an annual pace of 5.45 million.

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