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It’s been a big week for reporting real estate data. On Tuesday, we learned that new-home sales were up, and prices along with them. Denver took the proverbial double-digit cake, with the highest price increase in the country. And now this: July pending home sales were on the rise. Rather, there were on a teensy little rise.
This according to the Pending Home Sales Index from the National Association of Realtors®. The index measures homes that are under contract but not officially sold, and, per NAR, it inched forward 0.5% from June, to 110.9; that’s 7.4% above July 2014, when it was 103.3.
Since June’s numbers were revised upward a bit, “the index has increased year-over-year for 11 consecutive months and is the third highest reading of 2015, behind April (111.6) and May (112.3),” NAR writes.
And more pending home sales mean tighter inventory and higher prices. “Realtors® have reported since the spring that available listings in affordable price ranges remain elusive for some buyers trying to reach the market,” said Lawrence Yun, NAR’s chief economist.
Yun thinks the national median existing-home price could increase 6.3% in 2015, rising to $221,400, and expects existing-home sales this year to rise 7.1%, to near 5.29 million. Still, that’s about 25% less than the 2005 peak, which was 7.08 million.
Our own chief economist, Jonathan Smoke, is optimistic. “Higher prices are finally resulting in more listings inventory and in new single-family construction,” he said. There is a seasonal caveat, though: “The sales momentum remains strong, but we are entering a slower time of the year for demand.”
Meanwhile, there’s the unexpected stock market volatility combined with uncertainty about the Fed increasing interest rates. Could it mean it’s time to buy?
“The recent stock market correction has already produced a gift to the housing market in the form of lower mortgage rates and a window of time before rates move up again,” Smoke said.
Regional breakdown:
Northeast: up 4.0% to 98.8 in July, 12.1% above a year ago.
Midwest: unchanged at 107.8 in July, 5.7% above a year ago.
South: up 0.6% to 124.2 in July, 6.5% above a year ago.
West: down 1.4% to 103 in July, 7.5% above a year ago.
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