Pending Home Sales on a Record Roll

According to a National Association of Realtors (NAR) press release, contract activity for pending home sales has risen for six straight months, a pattern not seen in the history of the index since it began in 2001.

The “Pending Home Sales Index”, a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1. The index is at the highest level since June 2007 when it was 100.7. Lawrence Yun, NAR chief economist, said the housing market momentum has clearly turned for the better. “The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit,” he said.
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Housing Market Continues To Improve

Pending home sales jumped again - up by 3.2 percent for July, according to the National Association of Realtors. That’s the sixth straight month of improvement. The pending sales index is now at its highest level since June of 2007, a full 12 percent above a year ago.

Lawrence Yun, chief economist for the National Association of Realtors, pointed to two key factors that are pushing up market activity - The near record affordability of house purchases caused by moderate prices and low mortgage rates. Plus, the eight thousand dollar federal tax credit for first time buyers.

Meanwhile, there is more evidence that prices are turning around in growing numbers of markets around the U.S. Freddie Mac’s most recent home price index, released last week, showed national prices up by an average 2.7 percent. Orlando real estate is seeing markedly increased sales activity over a year ago, although mostly in the condo market.

There was more good news on the mortgage front with average rates on thirty year fixed rate loans declining to just below 5.2 percent last week, according to the Mortgage Bankers Association. Fifteen year rates averaged 4.6 for the week.

Looking at the larger economic picture, the Mortgage Bankers Association’s top forecaster, Orawin Velz, continues to predict that the recession will be over shortly - or already is over. She cited rising consumer expenditures - up two percent in the third quarter compared with a minus one percent in the second quarter. Plus manufacturing output is up, and new layoffs declined last week.

Who knew?

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