Pending home sales rebounded in July and have now risen in four of the last five months, according to the National Association of Realtors® press release this morning. All major regions experienced healthy gains except for the Midwest, which saw a slight decline. The Pending Home Sales Index,* a forward-looking indicator based on contract signings, is still 2.1 percent below July 2013.
Lawrence Yun, NAR chief economist, says favorable housing conditions are behind July’s higher 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,” 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.” Yun adds, “More importantly, steady job additions to the economy are helping family finances and giving them added confidence to enter the market.”
Still, Yun expects total home sales for 2014 to fall below results in 2013 by over 2% with median prices up about 5% this year and next.