Pending home sales in the South rose to a seasonally adjusted index level of 119.0 in July, an increase of 4.2 from June, but still 1.0 percent below where they were last July. The South had the highest index among the four national regions measured.
The Pending Home Sales Index issued by the National Association of Realtors is based on home sales where a contract has been signed but the transaction has not yet closed. The national sample is extrapolated using about 20 percent of transactions for existing-home sales. An index of 100 is based on contract activity in 2001, the first year the association began measuring pending sales.
According to the NAR, national pending home sales climbed 3.3 percent to a 105.9 index level in July from 102.5 in June, but are still 2.1 percent below where they were last July. Pending home sales have risen four out of the last five months nationwide and every region but the Midwest saw gains in July.
Lawrence Yun, the association’s chief economist, attributes the gains to favorable housing conditions. “Interest rates are lower than they were a year ago, price growth continues to moderate and total housing inventory is at its highest level since August 2012,” he said. Total housing inventory in July showed 2.37 million existing-homes for sale, nearing August 2012’s inventory of 2.40 million units.
The bump in inventory is welcome news for the housing market. “The increase in the number of new and existing homes for sale is creating less competition and is giving prospective buyers more time to review their options before submitting an offer,” explained Yun.
The Northeast saw the biggest jump in pending home sales in July from the month before, at 6.2 percent. In the Midwest, the index fell by 0.4 percent from the month before while in the West pending home sales rose 4.0 percent from June.
Looking ahead, Yun predicts that existing-home sales will be down this year by 2.1 percent compared with last year, to 4.98 million from 5.09 million.
The national median existing-home price is projected to grow by between 5 and 6 percent this year and 4 and 5 percent next year.