All major regions experienced healthy gains except for the Midwest, which saw a slight decline and overall the Pending Home Sales Index, a forward looking indicator based on contract signings, climbed 3.3% to 105.9 in July from 102.5 in June, but is still 2.1% below July 2013 when it was 108.2.
According to Lawrence Yun, NAR chief economist, favourable housing conditions are behind July’s higher sales activity. ‘Interest rates are lower than they were a year ago, price growth continues to moderate and total housing inventory is at its highest level since August 2012,’ he said.
‘The increase in the number of new and existing homes for sale is creating less competition and is giving prospective buyers more time to review their options before submitting an offer,’ he explained.
‘More importantly, steady job additions to the economy are helping family finances and giving them added confidence to enter the market,’ Yun added.
The PHSI in the Northeast jumped 6.2% to 89.2 in July, and is 8.3% above a year ago. In the Midwest the index marginally fell 0.4% to 104.6 in July, and is 6.4% below July 2013.
Pending home sales in the South increased 4.2% to an index of 119.0 in July, and is now 1% below a year ago. The index in the West rose 4% in July to 99.5, but remains 6% below July 2013.
Yun expects existing homes sales to be down 2.1% this year to 4.98 million, compared to 5.09 million sales of existing homes in 2013. The national median existing home price is projected to grow between 5% and 6% this year and 4% and 5% next year.
