WASHINGTON – Aug. 28, 2014 – Pending home sales rebounded in July and have now risen in four of the last five months, according to the National Association of Realtors® (NAR). All major regions experienced healthy gains except for the Midwest, which saw a slight decline.
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, climbed 3.3 percent to 105.9 in July from 102.5 in June, but it’s still 2.1 percent below July 2013 (108.2). The index is at its highest level since August 2013 (107.1) and is in positive territory. A score of 100 is considered an average level of contract 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,” says Lawrence Yun, NAR chief economist.
“The increase in the number of new and existing homes for sale is creating less competition and giving prospective buyers more time to review their options before submitting an offer,” Yun adds. “More importantly, steady job additions to the economy are helping family finances and giving them added confidence to enter the market.”
The PHSI in the Northeast jumped 6.2 percent to 89.2 in July and 8.3 percent above a year ago. In the Midwest, the index marginally fell 0.4 percent to 104.6 in July; it’s 6.4 percent below July 2013.
Pending home sales in the South increased 4.2 percent to an index of 119.0 in July, though it’s 1.0 percent below a year ago. The index in the West rose 4.0 percent in July to 99.5, but it remains 6.0 percent below July 2013.
Yun expects existing-homes sales to be down 2.1 percent 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 percent this year and 4 and 5 percent next year.
© 2014 Florida Realtors®
