Contracts for home sales rose 5.1% in March; mortgage rates drop

Posted by Emily Ray-Porter Group on Friday, April 29th, 2011 at 9:42am.

WASHINGTON — More Americans signed contracts to buy homes in March, but sales were uneven across the country and were not strong enough to signal a rebound in housing.

Sales agreements for homes rose 5.1% last month to a reading of 94.1, according to the National Association of Realtors' pending home sales index, released Thursday.

Signings are more than 20% above June, the low point of the housing bust. But the index is below 100, which is considered a healthy level.

Contract signings are usually a good indicator of where the housing market is heading. That's because there's usually a one- to two-month lag between a sales contract and a completed deal.

Meanwhile, fixed mortgage rates dipped this week, with the average rate on 30-year loans staying under 5% and the 15-year average falling below 4%.

Freddie Mac says the average rate on 30-year loans fell to 4.78% from 4.80% the previous week. It hit a 40-year low of 4.17% in November.

The average rate on 15-year fixed mortgages slipped to 3.97% from 4.02%. It fell to 3.57% in November, lowest level on records dating back to 1991.

Despite the low rates, housing remains in the doldrums. Four homebuilders reported softer sales in the most recent quarter. A weak economy, strict credit standards and a high number of foreclosures are chasing away buyers.

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