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Pending Sales Up Substantially in July
Contract Signings Surge in the West


The National Association of Realtors' Pending Home Sales Index surged to its highest level in more than 10 years, driven mainly by contract signings in the West region.

Driven by a surge in the West, pending home sales in July rose to its highest level in more than 10 years, the National Association of Realtors said. Had it not been for declining sales in the Midwest, the Pending Home Sales Index would have posted even better results. The PHSI monitors contract signings for new and existing homes, and it jumped 1.3 percent to a reading of 111.3 in July, compared to 109.9 in June. It is now 1.4 percent above the mark set in July 2015.

Regionally, the Midwest dropped 2.9 percent in July, while the West jumped 7.3 percent in contract signings for the month. The Northeast and South each moved higher 0.8 percent. The West is now 6.2 percent higher on a year-over-year basis.

"Amidst tight inventory conditions that have lingered the entire summer, contract activity last month was able to pick up at least modestly in a majority of areas," said Lawrence Yun, chief economist for the NAR. "More home shoppers having success is good news for the housing market heading into the fall, but buyers still have few choices and little time before deciding to make an offer on a home available for sale. There's little doubt there'd be more sales activity right now if there were more affordable listings on the market."

The West moved to its highest level in more than three years, Yun added, spurred by a stronger labor market. "If homebuilding increases in the (West) region to tame price growth and alleviate the ongoing affordability concerns, the healthy rate of job gains should support more sales."

Construction Dive said pending home sales data complements other recent housing industry reports, with the exception of a 3.2 percent drop in existing home sales. Builder confidence climbed two points, housing starts jumped 2.1 percent, and new home sales soared 12.4 percent.

Redfin Homebuyer Index Jumps in July
Homebuyer demand, according to the Redfin Housing Demand Index, jumped 5.7 percent in July to a reading of 94. This comes after the HDI back-to-back declines in in May and June, both on a month-over-month basis.

"The jump in overall demand was driven by an increase in the number of Redfin customers requesting home tours, up 14.3 percent from June," Redfin said. "Yet with no real pickup in inventory from last month (up 0.3%), increased tour demand did not translate into more offers. The number of Redfin customers writing home-purchase offers fell 1.8 percent from June to July."

However, demand this year pales in comparison to 2015, when the index was mostly above 100. "Buyers continue to be persistent when it comes to giving homes a shot, checking out what's coming on the market despite new inventory being few and far between," said Nela Richardson, Redfin chief economist. "But strong tour growth isn't translating into offer growth, so we'll likely see a second lackluster month for sales in August."

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November 17, 2019, 5:41 am PDT

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