The latest National Association of Realtors (NAR) Pending Home Sales Index indicates that home sales are set to beat records set in the last two years. Projected sales based on contract signings were up 2.4% in July for the month and 12.4% compared to July 2011. The last time sales were this high was just before the expiration for the homebuyer tax credit, which encouraged a surge of buying that then proceeded to drop off. Analysts believe this is just the beginning of more growth in home sales as the U.S. market continues its recovery. For more on this continue reading the following article from Property Wire.
Pending home sales in the United State rose in July to the highest level in over two years and remain well above year ago levels, according to the latest figures from the National Association of Realtors.
Its Pending Home Sales Index, a forward looking indicator based on contract signings, rose 2.4% to 101.7 in July from 99.3 in June and is 12.4% above July 2011 when it was 90.5. The data reflect contracts but not closings. NAR chief economist Lawrence Yun said that the index is at the highest level since April 2010, which was shortly before the closing deadline for the home buyer tax credit.
While the month to month movement has been uneven, more importantly we now have 15 consecutive months of year on year gains in contract activity,? Yun explained. He pointed out that limited inventory is constraining market activity. ‘All regions saw monthly increases in home buying activity except for the West, which is now experiencing an acute inventory shortage’ Yun added.
The PHSI in the Northeast increased 0.5% to 77 in July and is 13.4% higher than a year ago. In the Midwest the index grew 3.4% to 97.4 in July and is 20.2% above July 2011. Pending home sales in the South rose 5.2% to an index of 111.7 in July and are 15.6% above a year ago while in the West the index slipped 1.7% to 109.9 but is 1.3% higher than July 2011.
Existing home sales are projected to rise 8 to 9% in 2012, followed by another 7 to 8% gain in 2013. Home prices are expected to increase 10% cumulatively over the next two years. Falling visible and shadow inventories point toward continuing price gains. ‘Expected gains in housing starts of 25 to 30% this year, and nearly 50% in 2013, are insufficient to meet the growing housing demand,’ Yun said.
This article was republished with permission from Property Wire.