The U.S. housing market saw pending home sales rise for most of the nation in July, which was the second highest reading in over a decade, according to the latest report from the National Association of Realtors® (NAR). The Midwest was the only area in the country that went lower.
The NAR ‘s Pending Home Sales Index is now at its second highest reading this year after April (115.0). The Index had risen 1.3% to 111.3 in July from a downwardly revised 109.9 in June, and is now 1.4% higher than July 2015 (109.8).
Existing-home sales are forecast to rise 2.8% from 2015, to approximately 5.38 million units which is the highest annual pace since 2006 (6.48 million).
Regionally across the country, pending home sales in the Northeast were higher by 0.8% to 96.8 in July, and is now 1.1% above this same time period last year. The Midwest went down 2.9% to 105.8 in July, which is a 1.1% decrease from July 2015.
The South saw a 0.8% increase to an index of 123.9 in July, and are now 0.4% higher than last July. The West experienced the largest gains with a 7.3% gain in July to 108.7, and is now 6.2% above a year ago.
The NAR said that recent residential construction data had shown the size and costs of new homes decreased over the past year.
Lawrence Yun, NAR chief economist had said, “Amidst tight inventory conditions that have lingered the entire summer, contract activity last month was able to pick up at least modestly in a majority of areas. More home shoppers having success is good news for the housing market heading into the fall, but buyers still have few choices and little time before deciding to make an offer on a home available for sale. There’s little doubt there’d be more sales activity right now if there were more affordable listings on the market.”
Yun adds, “The index in the West last month was the highest in over three years, 1 largely because of stronger labor market conditions. If homebuilding increases in the region to tame price growth and alleviate the ongoing affordability concerns, the healthy rate of job gains should support more sales.”
“Realtors® in several high-cost areas have been saying for quite a while that there is robust demand for single-family starter homes and townhomes at an affordable price point for young buyers,” adds Yun. “The homeownership rate won’t move up from its over 50-year low 2 without a meaningful boost from first-time buyers, whose participation has yet to noticeably increase so far this year despite mortgage rates near all-time lows 3.”