Pending home sales hit highest level in more than two years

Pending home sales rose in July to the highest level in more than two years as the housing market continues showing sustained signs of recovery.

The sales index, a forward-looking indicator based on contract signings, was up 2.4 percent to 101.7 last month, its highest level since April 2010, shortly before the expiration of a home buyer tax credit, the National Association of Realtors said Wednesday.

The July figure is up 12.4 percent above the July 2011 level of 90.5.

"While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity," said Lawrence Yun, the NAR chief economist.

The data reflect contracts but not closings.

Limited inventory is constraining market activity, especially in the West, which is dealing with an "acute inventory shortage," Yun said.

Still, the other three regions experienced improvement last month.

The Northeast saw pending sales rise 0.5 percent to 77.0, 13.4 percent higher than a year ago, while the Midwest had a 3.4 percent improvement to 97.4, 20.2 percent above July 2011.

Pending home sales in the South rose 5.2 percent to 111.7, 15.6 percent above a year ago.

In the West the index slipped 1.7 percent in July to 109.9 but is 1.3 percent higher than July 2011.

Existing-home sales are projected to rise 8 to 9 percent in 2012, followed by another 7 to 8 percent gain in 2013.

Home prices are expected to increase 10 percent cumulatively over the next two years.

"Falling visible and shadow inventories point toward continuing price gains," Yun said. "Expected gains in housing starts of 25 to 30 percent this year, and nearly 50 percent in 2013, are insufficient to meet the growing housing demand."

Source: http://thehill.com/blogs/on-the-money/1091-housing/246381-pending-home-sales-hit-highest-level-in-more-than-two-years

February Pending Home Sales Rise

Pending home sales increased in February but with notable regional variations, according to the NATIONAL ASSOCIATION OF REALTORS®.
NAR’s Pending Home Sales Index, which measures the number of homes under contract to sell, but not yet closed, rose 2.1% in February.
NAR Chief Economist Lawrence Yun says February’s rise is part of a longer upward trend. “Month-to-month movements can be instructive, but in this uneven recovery it’s important to look at the longer-term performance,” he said. “Pending home sales have trended up very nicely since bottoming out last June, even with periodic monthly declines. Contract activity is now 20% above the low point immediately following expiration of the home buyer tax credit.”
Yun notes there could have been some weather impact in the February data. “All of the regions saw gains except for the Northeast, where unusually bad winter weather may have curtailed some shopping and contract activity.”
The PHSI in the Northeast fell 10.9% in February and is 18.4% below a year ago. In the Midwest, the index rose 4.0% in February but is 15.9% below February 2010. Pending home sales in the South increased 2.7% but are 5.3% below a year ago. In the West, the index rose 7.0% and is 0.6% higher than February 2010.
“We may not see notable gains in existing-home sales in the near term, but they’re expected to rise 5% to 10% this year with the economic recovery, job creation, and excellent affordability conditions providing confidence to buyers who’ve been on the sidelines,” Yun said.
Source: NAR


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Pending Home Sales Continue Uptrend

Pending home sales improved further in December, marking the fifth gain in the past six months, according to the National Association of Realtors®
The Pending Home Sales Index,* a forward-looking indicator, increased 2.0 percent to 93.7 based on contracts signed in December from a downwardly revised 91.9 in November. The index is 4.2 percent below the 97.8 mark in December 2009. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.
Lawrence Yun, NAR chief economist, credits good affordability conditions and economic improvement. “Modest gains in the labor market and the improving economy are creating a more favorable backdrop for buyers, allowing them to take advantage of excellent housing affordability conditions. Mortgage rates should rise only modestly in the months ahead, so we’ll continue to see a favorable environment for buyers with good credit,” he said.

“In the past two years, home buyers have been very successful, with super-low loan default rates, partly because of stable home prices during that time. That trend is likely to continue in 2011 as long as there is sufficient demand to absorb inventory,” Yun said. “The latest pending sales gain suggests activity is very close to a sustainable, healthy volume of a mid-5 million total annual home sales. However, sales above 6 million, as occurred during the bubble years, is highly unlikely this year.”
The PHSI in the Northeast increased 1.8 percent to 73.9 in December but is 5.3 percent below December 2009. In the Midwest the index rose 8.0 percent in December to 84.6 but is 5.1 percent below a year ago. Pending home sales in the South jumped 11.5 percent to an index of 101.9 and are 1.7 percent above December 2009. In the West the index fell 13.2 percent to 105.8 and is 10.7 percent below a year ago.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales; it coincides with a level that is historically healthy.
NOTE: Existing-home sales for January will be reported February 23 along with revisions for the past three years, and the next Pending Home Sales Index will be released February 28. Fourth quarter metro area home prices and state home sales will be published February 10; release times are 10:00 a.m. EST.
Source: http://www.realtor.org/press_room/news_releases/2011/01/phs_continue