NAR Sees Pending Sales Trend Upward in Fifth Month
Pending home sales are up for the fifth consecutive month in June, marking the first such streak in six years. The index, based on contracts signed in June, rose 3.6% from May and is up 6.7% from the same time last year, according to the National Association of Realtors (NAR). The last time the index saw five months of monthly gains together was in July 2003. Pending home sales inched up 0.4% in the Northeast and is up 5.8% from last year. In the Midwest, pending sales are up 0.8% from May and 11.6% from last year. Pending sales were up 7.1% in the South and 2.9% in the West. NAR attributed the rise in pending sales to high affordability, noting NAR's affordability index remains 36.6% above the same time last year. Under the current index, NAR said a typical family would devote 15.7% of gross income to mortgage principal and interest, well below a 25% standard. “A monthly rise in home prices and somewhat higher mortgage interest rates led to a modest decline in affordability in June, but it was still the sixth highest index on record dating back to 1970,” NAR chief economist Lawrence Yun said in a statement on the index. “Because housing is so affordable in today’s market, job security and the first-time buyer tax credit are bigger factors in influencing home sales.” Write to Diana Golobay.