Pending Home Sales Tick Higher on Strong Sales in the Northeast

Housing

Published: August 27, 2015 10:35 am

Last Updated: April 28, 2020 3:29 am

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The National Association of Realtors (NAR) Monday morning released its data on pending sales of existing homes for July. The pending home sales index inched up 0.5% to 110.9 from an upwardly revised June reading of 110.4. The index has now risen for six of the past seven months. The July reading was the third highest for 2015 to date.

The consensus estimate called for a month-over-month 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.

The index has been above 100 (the “average” reading) for 11 straight months.

The NAR’s chief economist noted:

Led by a solid gain in the Northeast, contract activity in most of the country held steady last month, which bodes well for existing-sales to maintain their recent elevated pace to close out the summer. While demand and sales continue to be stronger than earlier this year, Realtors® have reported since the spring that available listings in affordable price ranges remain elusive for some buyers trying to reach the market and are likely holding back sales from being more robust. … In light of the recent volatility in the stock market, it’s possible some prospective buyers may err on the side of caution and delay decisions, while others may view real estate as a more stable asset in the current environment. Overall, the prospects for ongoing strength in the housing market remain intact for now.

By region, home sales increased by 4.1% to an index score of 98.4 in the Northeast and is 12.1% higher than in July of 2014. In the South, sales rose 0.6% to an index score of 127.2, up 6.5% over a year ago.

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Sales dropped by 1.4% in the West to an index score of 103, still up 7.5% compared with July 2014. Sales in the Midwest remained unchanged with an index score of 107.8, still 5.7% higher than a year ago.

The national median existing-home price for all housing types in 2015 is expected to increase around 6.3% to $221,400, down by $500 from the June projection. Total existing-home sales this year are forecast to increase 7.1% to around 5.29 million, about 25% below the prior peak set in 2005 (7.08 million), but up from a total of 5.27 million projected in June.

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