Pending Home Sales Back Up to 2-Year High: Realtors

Pending home sales in May hit the highest level in the past two years, and are 13 percent above year-ago levels, according to the National Association of Realtors
The group’s Pending Home Sales Index, based on contract signings, jumped 5.9 percent to 101.1 in May, from 95.5 in April.  It is 13.3 percent above May 2011 when it was 89.2.  The data represents contracts but not closings.
The index also reached 101.1 in March, which is the highest level since April 2010 when buyers were rushing to beat the deadline for the home-buyer tax credit.
The latest increase in contract signings marks 13 consecutive months of year-over-year gains, said Lawrence Yun, NAR chief economist.
“Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10 percent improvement in total sales for 2012,” Yun said.
The national median existing-home price is expected to rise 3.0 percent this year and another 5.7 percent in 2013, the NAR said.
The national median existing-home price is expected to rise 3.0 percent this year and another 5.7 percent in 2013.
However, low inventory could restrain some contract activity, Yun said.
Low inventory is partly a result of “underwater” homeowners who are unwilling to list their homes, which would require a lengthy short sale process, or additional cash to complete the transaction.
NAR estimates 85 percent of homeowners have positive equity, with 15 percent in negative equity.
“If credit conditions returned to normal and if we had more inventory, especially in the lower price ranges, more people would become successful buyers,” Yun said.  “In an environment of historically favorable housing affordability conditions, it’s frustrating to see some consumers thwarted in the process.”

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