August 30, 2012 (Chris Moore)
Contract signings for the purchase of existing homes bounced back in July after falling for two of the previous three months according to the National Association of Realtors® (NAR) Pending Home Sales Index (PHSI).
It was only the second time in the last four months that contract signings have seen an increase, climbing 2.4 percent to 101.7 in July and moving 12.7 percent higher than in July of last year when the Index was at 90.5.
July’s increase left the Index at roughly the same level as two years ago which followed the end of the home buyer tax credit program.
Lawrence Yun, chief economist of NAR, stated, “While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity. All regions saw monthly increases in home-buying activity except for the West, which is now experiencing an acute inventory shortage.”
Three of the four regions in the Index posted increases in their monthly level of sales contract activity, which was in stark contract to June when three of the four regions reported declines. All four regions reported a higher level of contract signings compared to a year ago.
The West recorded the only decline in monthly signed contracts, falling 1.7 percent from June. The South posted the largest increase, climbing 5.2 percent from the previous month while the Midwest and the Northeast saw gains of 3.4 and 0.5 percent, respectively.
Compared to July 2011, the Midwest was 20.2 percent higher, the South improved 15.6 percent and the Northeast and the West saw activity improve by 13.4 and 1.3 percent, respectively.
The PHSI is a forward looking indicator which generally indicates closings one to two months in the future.
Tags: pending home sales, existing home sales, contract signings, contract cancellations