Us pending home sales up for 27 months in a row

The latest NAR report reveals that pending homes slipped 1.3 per cent in July. Despite the decline, though, pending sales remain 6.7 per cent above the same month last year, as the US housing market continues to recover.

Lawrence Yun, NAR chief economist, comments on the uneven nature of the market recovery across the country: “The modest decline in sales is not yet concerning, and contract activity remains elevated, with the South and Midwest showing no measurable slowdown.  However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the Northeast and the West.”

The Pending Home Sales Index in the Northeast fell 6.5 percent to 81.5 in July but is 3.3 percent higher than a year ago.  In the Midwest the index slipped 1.0 percent to 113.2 in July but is 14.5 percent above July 2012.  Pending home sales in the South rose 2.6 percent to an index of 121.5 in July and are 7.7 percent higher than a year ago.  The index in the West fell 4.9 percent in July to 108.6, and is 0.4 percent below July 2012.

He added: “More homes clearly need to be built in the West to relieve price pressure, or the region could soon face pronounced affordability problems.”

The NAR projects existing-home sales to increase 10 percent for all of 2013, totaling about 5.1 million - and to reach approximately 5.2 million next year.  With ongoing supply imbalances, the national median existing-home price is expected to grow nearly 11 percent this year, and moderate to a gain of 5 to 6 percent in 2014, with rising construction taking some of the pressure off of home prices.