Number of available Las Vegas homes drops

WASHINGTON -- The number of Americans who signed contracts to buy U.S. homes dipped in February from nearly a two-year high, a mixed signal ahead of the spring home-buying season.

The National Association of Realtors said Monday that its index of sales agreements declined 0.5 percent last month to a reading of 96.5. January's reading of 97 was the highest since April 2010, the last month buyers could qualify for a federal home-buying tax credit.

A reading of 100 or higher is considered healthy. April 2010 was also the last time it was that high.

More signings in recent months are among the signs of a slight pick-up in the housing market. Still, analysts said the decline in February report was disappointing after the three best months of hiring in two years.

"So far, stronger employment growth has not prompted significantly sturdier willingness to sign purchase contracts, despite -- or perhaps because of -- some erosion in house prices over the last few months," said Pierre Ellis, an economist at Decision Economics.

Contract signings typically signal where the housing market is headed. There's a one- to two-month lag between a signed contract and a completed deal. A sale isn't final until a mortgage is closed.

February appeared to be stronger for sales contracts in Las Vegas. The number of homes available without a pending contract dropped to 6,543 in February from 8,000 in January, the Greater Las Vegas Association of Realtors reports. It's down from 12,000 a year ago.

Kolleen Kelley, the local Realtors association's president, said sales contracts are being written every day in Las Vegas. Nearly every home she shows has four or five offers on it.

"As we lose inventory, the pickup will be in new homes," Kelley said. "If people can't find what they're looking for, I think we'll see an uptick in new homes. The builders will like that."

January and February made up the best winter for completed sales in five years, when the housing crisis began. And builders are more confident about the market and have is year. In February, they requested the most permits to build single-family homes and apartments since October 2008.

Las Vegas homebuilders pulled 236 new home permits in February, unchanged from the same month a year ago. Permits reached 457 in June when the home-buying tax credit was driving sales.

Homes are the most affordable they've been in decades. And mortgage rates remain a bargain.

"The worst of the downturn in the housing industry appears to be over," said Monica Caruso, spokeswoman for the Southern Nevada Home Builders Association. "We have reason for optimism about continued improvement."

The national job market is also getting stronger. The economy has added an average of 245,000 jobs per month from December through February. The unemployment rate, while still high in Nevada, has fallen to 8.3 percent nationwide, the lowest in three years.

Another reason for the uptick in sales: Fannie Mae and Freddie Mac have both announced plans to raise the fees on mortgage applications in April. The government-controlled mortgage buyers own or guarantee about half of all U.S. mortgages and 90 percent of new loans.

Analysts caution that the damage from the housing bust is deep and the industry is years away from full recovery.

Potential buyers are holding off for a number of reasons. Despite the recent job gains, unemployment remains high. Many buyers can't qualify for loans. Lenders are requiring higher credit scores and larger down payments.

And some who can qualify are hesitant to buy because they worry home prices will keep falling.

Las Vegas Review-Journal reporter Hubble Smith contributed to this report.