Pending home sales nationwide increased by 2.4 percent month-over-month in June, following a fall in April and then an uptick in May, according to a report from the National Association of Realtors released today.
The Pending Home Sales Index rose to 90.9 in June from 88.8 in May and it is 19.8 percent above the 75.9 reading in June 2010, the low point immediately after the expiration of the federal homebuyer tax credit.
Pending home sales in the South increased 4.4 percent to an Index of 99.2 and are 19.1 percent higher than June 2010, while in the Northeast, the Index slipped 0.4 percent to 68.9 in but is still 19.4 percent higher than last year.
“For the majority of transactions, the lag time between pending contracts to actual closings is one to two months. Therefore, the two consecutive months of rising activity should lead to overall improvement in closed sales in upcoming months,” said Lawrence Yun, NAR’s chief economist. “Though a higher than normal cancellation rate can hold back final closing figures, it could well be that some past cancellations are nothing more than delayed buying decisions rather than outright cancellations.”
The market has been constricted, Yun said, as a result of tight credit and economic uncertainty.
“The best way to ensure a more solid recovery in housing is to simply return to normal, sound credit standards so more creditworthy homebuyers can get a mortgage,” he said. — Katherine Clarke