Inked Home Sales Continue To Increase

Multiple home price indexes have revealed a welcome uptick in property values in recent weeks. Following suit, pending home sales are up for the fifth consecutive month, the first time in six years for such a streak.

According to a report released by the National Association of Realtors (NAR) this week, expected home sales are up 3.6 percent. This projection is based on contracts signed in June, keeping in mind that it can take as long as two months to close on a home after signing a contract.

On a regional basis, homebuyers in the South appear to be getting back into the game the quickest – the Pending Sales Index there jumped 7.1 percent in June. In the West, the index rose 2.9 percent. In the Northeast, it gained 0.4 percent, and in Midwest part of the country, pending sales are up 0.8 percent.

Lawrence Yun, NAR’s chief economist, credits a combination of positive market factors for fueling the gains. “Historically-low mortgage interest rates, affordable home prices, and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” Yun explained.

“A monthly rise in home prices and somewhat higher mortgage interest rates led to a modest decline in affordability in June, but it was still the sixth highest index on record, dating back to 1970,” Yun explained. “Because housing is so affordable in today’s market, job security and the first-time buyer tax credit are bigger factors in influencing home sales.”

With the window for the $8,000 federal tax credit shrinking, first-time buyers will need to act quickly to take advantage. Taking into account the lag time between contract signing and closing, first-time homebuyers have until November 30 to finalize the deal in order to get the refund.

Yun says he expects existing-home sales to gradually rise over the balance of the year, with conditions varying around the country. “It appears home sales are on a sounder footing and inventory is gradually being absorbed,” he added.

source: DS News