June 28, 2012 (Chris Moore)
Contract signings for home purchases rebounded from April’s surprise decline, increasing 5.9 percent to 101.1 in May according to the National Association of Realtors® (NAR) Pending Home Sales Index (PHSI), putting the Index back at March’s level.
The increase in contract signings pushed the Index 13.3 percent higher than May of last year when the Index was at 89.2 and left the Index at roughly the same level as two years ago when home buyers were rushing to beat the end of the home buyer tax credit program.
Lawrence Yun, chief economist of NAR, stated, “The housing market is clearly superior this year compared with the past four years. The latest increase in home contract signings marks 13 consecutive months of year-over-year gains.”
All four of the regions in the Index experienced increases in their monthly level of sales contract activity and all four also outperformed the previous year’s sales activity.
The West recorded the largest gain in signed contracts, increasing 14.5 percent from April, followed by the Midwest where contract signings increased by 6.3 percent from the previous month while in the Northeast and the South, contract signings increased by 4.8 and 1.1 percent, respectively.
Compared to May 2011, the Midwest was 22.1 percent higher, the Northeast improved 19.8 percent and the South and the West saw activity improve by 11.9 and 4.8 percent, respectively.
“Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10 percent improvement in total sales for 2012,” Yun added.
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