Housing Market: Pending Home Sales Still Holding Strong

The Pending Home Sales Index is released monthly by the National Association of Realtors.  This index reports on the housing sector and breaks down pending sales of existing homes that have signed contracts.  Since this information is based on a signed contract, not a closed sale, it is seen as more of a forward-looking index.  With this latest release, for the month of July, we see Pending Home Sales cooling a bit across the nation by about 2.3% year over year, mostly due to a low level of inventory, but is still at a level of 106.2.  A level of 100 is the average level of Pending Home Sales so anything over 100 is seen as a positive indicator.  When digging deeper into the report, we also see that in many markets, pending sales are still increasing, but are just off their highs from last year.  The northeast and midwest showed gains for the month of July, but are slightly lower than where they were this time last year. 

Lawrence Yun, the National Association of Realtors’ Chief Economist has said, “it is important to note how much the housing market has recovered since the depths of the financial crisis.  Foreclosures sit near historic lows and record high home values have helped millions of households build substantial wealth.”  Lawrence also added that, “Rising inventory levels- especially if new home construction finally starts picking up, should slow the pace of appreciation to around 2-4% which will help first-time home buyers and be good for long-term health of the nation’s housing market.”