May pending home sales drop even with low mortgage rates

Lost equity. About a quarter of all residences with mortgages are worth less than the unpaid mortgage — leaving many owners unable to move and buy another house.

clipped from www.usatoday.com The number of buyers who signed contracts to purchase homes tumbled 30% in May, as low mortgage rates do little to motivate home buyers. The National Association of Realtors said Thursday its seasonally adjusted index of sales agreements for previously occupied homes fell to 77.6 from 110.9. May's reading was the lowest dating back to 2001. The index was down 15.9% from a year earlier. The average rate on a 30-year, fixed mortgage was 4.89% in May, Freddie Mac said. •Lost equity. About a quarter of all residences with mortgages are worth less than the unpaid mortgage — leaving many owners unable to move and buy another house.