Aug
29

Contract Signings Down . . . and Up

August 29, 2011

U.S. pending home sales in July were down slightly from the previous month but way up compared to the same month last year.

The data is the result of the National Association of Realtors‘ Pending Home Sales Index, which predicts future activity because it’s based on contract signings, not closings.

real estate purchase contract and a penThe index fell 1.3 percent to 89.7 in July from 90.9 in June but is 14.4 percent above the 78.4 index in July 2010.

Only one region of the country marked an increase from June:

*The Midwest index slipped 0.8 percent to 79.1 in July but is 18.8 percent above last July’s index.

*The Northeast index fell 2 percent to 67.5 in July but is 9.7 percent above the index during the same month last year.

*The South index dropped 4.8 percent to 94.4 in July but is 9.5 percent higher than the index in July 2010.

*The West index rose 3.6 percent to 110.8 in July and is 20.6 percent above last July’s index.

“Looking at pending home sales over a longer span, contract activity over the past three months is fairly comparable to the first three months of the year, and well above the low seen in April,” said Lawrence Yun, NAR chief economist.

“The underlying factors for improving sales are developing, such as rising rents, record high affordability conditions and investors buying real estate as a future inflation hedge. It is now a question of lending standards and consumers having the necessary confidence to enter the market.”

Categories: Economy

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