Americans took advantage of foreclosures in August by signing more contracts to purchase previously owned homes, according to data released Wednesday by a real estate organization.
Pending home sales climbed by 7.4 per cent in August, but the National Association of Realtors cautioned that mortgages from the home sales must still be approved at a time when the financial crisis is making credit for loans difficult to secure, reported dpa.
"It's unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we're hopeful most of the increase will translate into closed existing home sales," said Lawrence Yun, the association's chief economist.
But the increase in signed contracts to buy homes provides some good news at a time when the financial crisis is prompting a worldwide economic slowdown.
The hike in pending home sales is also a result of home foreclosures caused by the faulty loans that has caused the defaults and lead to the financial crisis.
"Vulture investors buying foreclosed home are likely the key driver of the rise," Ian Shephardson, a chief economist at High Frequency Economics in Valhalla, New York, told Bloomberg news.
"But sales are sales and they all take inventory off the market. The key test now is what happens in September and October, but these numbers today are welcome," he added.