Pending home sales were up from last year, as the housing market continues to pick up steam.
New pending home sales data from the National Association of Realtors is reporting a 14.4 percent increase from April 2011.
The data, which is gleaned from the Pending Home Sales Index, was down monthly by 5.5 percent after three straight months of increases, but NAR’s report found several reasons to be optimistic about pending sales going forward. Here are six:
- Numerically, the index is up 12 points from last year to 95.5.
- The yearly increases for the index mark the 12th straight month of such gains for the index, which remains well above levels in the 2008-2011 years.
- Regionally, the index is 23.0 percent higher in the Midwest than in April 2011, and the South’s index of 105.7 (the highest of all the regions) is 13.3 percent higher.
- Based on the index, NAR upgraded its housing forecast for existing-home sales, which it expects to reach 4.66 million in 2012 and 4.92 million in 2013, compared to 4.26 million in 2011.
- Lower inventories have improved forecasts for prices, which were upwardly revised to increase 2-3 percent in 2012 and 4-5 percent in 2013, with Miami and Phoenix achieving double-digit increases by year’s end.
- Those price gains would be especially helpful to underwater homeowners; NAR Chief Economist Lawrence Yun predicts that with a 5 percent national price gain, roughly two million homeowners would return to positive equity.
“Housing market activity has clearly broken out at notably higher levels and is on track to see the best performance since 2007,” Yun said. “All of the major housing market indicators are expected to trend gradually up.”
Home buyers are more optimistic about the market and are taking advantage of the low interest rates. We are seeing a consistent stream of closings. Although the selling prices aren’t what they were 6/7 years ago, inventory is finally moving again.