The National Association of Realtors (NAR) this morning released its data on pending sales of existing homes in July. The pending home sales index slipped 1.3% from an index reading of 110.9 in June, and it is 6.7% higher than in July 2012 when the index reading was 102.6. The consensus estimate called for a decrease 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.

The May index reading of 111.3 was the highest reading in more than six years, since an index score of 112.8 in December of 2006.

Total existing home sales are expected to rise more than 10% year-over-year in 2013, up from last month’s projection for an increase of 8%. National median home prices are forecast to rise by 11% this year, primarily due to the inventory shortage of existing homes for sale. The median price forecast is flat with last month’s forecast.

The NAR’s chief economist noted:

[H]igher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the Northeast and the West. More homes clearly need to be built in the West to relieve price pressure, or the region could soon face pronounced affordability problems.

Pending home sales in the Northeast fell 6.5% in July, posting an index reading of 81.5, up 3.3% from July 2012. The index rose slipped 1% in the Midwest and rose 2.6% in the South. The index fell 4.9% in the West.

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