June Sees A Rise In Pending Home Sales

Homebuyers are eager to purchase because of the record-low mortgage rates. The month of May brought the largest monthly gain ever recorded, and this month the rise in pending home sales is back up to pre-pandemic levels.

The National Association of Realtors (NAR) publishes The Pending Home Sales Index (PHSI) which is the leading indicator of housing activity. The PHSI measures housing contract activity and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. The PHSI is issued around the 25th of each month.

According to the graph, the PHSI rose to 16.6% from 99.6 in May to 116.1 in June. The sales on a year-over-year basis were 6.3% higher than this time last year. This data is shown with existing-home sales, but the pending home sales index leads the existing-home index by a couple of months.

“It is quite surprising and remarkable that, in the midst of a global pandemic, contract activity for home purchases is higher compared to one year ago,” said Lawrence Yun, NAR’s chief economist. “Consumers are taking advantage of record-low mortgage rates resulting from the Federal Reserve’s maximum liquidity monetary policy.”

As far as the national regions, all four regions had a double-digit gain in month-over-month contract activity. The Northeast saw a 54.4% increase to 95.4, in the Midwest there was a 12.2% rise to 110.9, in the South it jumped 11.9% to an index of 140.3 and in the West, it jumped 11.7% to 99.6.

“The Northeast’s strong bounce back comes after a lengthier lockdown, while the South has consistently outperformed the rest of the country,” Yun said. “These remarkable rebounds speak to exceptionally high buyer demand.”

The housing market is making a strong recovery with record-low mortgage rates. The outlook for the U.S. economy is promising.

Click Here For the Source of the Information.