Pending home sales mostly increased across the country during the month of July, with all regions except for the Midwest experiencing contract signing gains.
The National Association of REALTORS®’ Pending Home Sales Index, which is based on pending sales of existing homes, hit 105.9 in July, up from 102.5 in June. This marks the third consecutive month that the index is above 100, a score that is considered to be the average level of contract activity.
Regionally, the Northeast saw the biggest gains in pending home sales, with a 6.2 percent jump from 83 in June to 89.2 in July. The South experienced a 4.2 percent increase to an index of 119, while the West’s index rose 4 percent to 99.5 in July.
The Midwest – the only region that did not post gains in pending home sales last month – experienced a slight decline, falling 0.4 percent to 99.5.
The overall increase in pending home sales can be contributed to favorable housing conditions, according to NAR Chief Economist Lawrence Yun.
Yun cited lower interest rates, moderate price growth, and an increase in housing inventory as reasons for the PHSI’s climb.
“The increase in the number of new and existing homes for sale is creating less competition,” Yun said, “and is giving prospective buyers more time to review their options before submitting an offer.”
The improvement of the job market is also helping family finances and giving more people confidence to enter the housing market, Yun said.
Despite the increase in the PHSI, housing sales in 2014 are still below 2013 levels. Yun said he expects existing-home sales to be down 2.1 percent this year, falling from 5.09 million sales of existing homes in 2013 to approximately 4.98 million sales in 2014.
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