Housing

Pending Home Sales at Seven-Year High

House for Sale
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The National Association of Realtors (NAR) this morning released its data on pending sales of existing homes in May. The pending home sales index rose 6.5% from a downwardly revised 105.2 in April to 112.3, and it is 12.1% higher than in April 2012 when the index reading was 100.2. The consensus estimate called for an increase of 1% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.

Total existing home sales are expected to rise 8.5% to 9% year over year in 2013 to a total of nearly 5.1 million homes sold. National median home prices are forecast to rise by 10% this year.

The NAR’s chief economist noted:

Even with limited choices, it appears some of the rise in contract signings could be from buyers wanting to take advantage of current affordability conditions before mortgage interest rates move higher. This implies a continuation of double-digit price increases from a year earlier, with a strong push from pent-up demand.

Pending home sales in the Northeast United States were unchanged in May, posting an index reading of 92.3, but up 14.3% from May 2012. The index rose in all four NAR regions, though the West remains just 1.1% above last year’s index, due primarily to a lack of inventory.

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