U.S. pending home sales up year-over-year

Pending home sales declined 1.3 percent in July, but were still well
above year-ago levels, according to data released today from the National
Association of Realtors.

The Pending Home Sales Index slipped to 89.7 in July from 90.9 in
June, but was 14.4 percent above the 78.4 index in July 2010.

The sales index in the Northeast declined 2 percent to 67.5 in July month-over-month, but was
9.7 percent above July 2010’s level, while pending home sales in the South
fell 4.8 percent to an index of 94.4. Pending home sales in the south were 9.5 percent higher than they were
July 2010.

“The market can easily move into a healthy expansion if mortgage
underwriting standards return to normalcy,” said Lawrence Yun, NAR’s
chief economist. “We also need to be mindful that not all sales
contracts are leading to closed existing home sales. Other market
frictions need to be addressed, such as assuring that proper
comparables are used in appraisal valuations, and streamlining the
short sales process.”

Contract activity over the past three months was fairly comparable to
the first three months of the year, and well above the low seen in
April, he said.

“The underlying factors for improving sales are developing, such as
rising rents, record high affordability conditions and investors
buying real estate as a future inflation hedge,” he said. “It is now a
question of lending standards and consumers having the necessary
confidence to enter the market.”
–– Miranda Neubauer