Home Sales Expected to Rise Through Summer's End

With summer drawing to a close, many fear a significant slow-down in the rate of home sales. However, according to new data from the National Association of Realtors, existing-home sales should remain strong through the end of the season! For the sixth time in seven months, sales contracts continued to grow, increasing slightly in July.

According to the NAR's Pending Home Sales Index, which indicates future home sales by examining current contract signings, the housing market should remain strong as summer winds down. The index rose 0.5% in July to 110.9, 7.4% above the same time last year. An index score of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined.

"Led by a solid gain in the Northeast, contract activity in most of the country held steady last month, which bodes well for existing-sales to maintain their recent elevated pace to close out the summer," says NAR Chief Economist Lawrence Yun. "While demand and sales continue to be stronger than earlier this year, REALTORS® have reported since the spring that available listings in affordable price ranges remain elusive for some buyers trying to reach the market and are likely holding back sales from being more robust."

Pending Home Sales in July by Region
Northeast: up 4% to 98.8, 12.1% above July 2014.
South: up 0.6% to 124.2, 6.5% above July 2014.
Midwest: steady at 107.8, 5.7% above July 2014.
West: fell 1.4% to 103, 7.5% above July 2014.

Although housing supply did make slow gains through the month of August, the trend of low housing supply likely will persist into the fall, which will prompt existing-home prices to continue to rise, Yun notes. The national median existing-home price will likely rise 6.3 percent this year to $221,400, according to NAR. Existing-home sales also are expected to rise by 7.1 percent this year, totaling 5.29 million. While these numbers are very positive, they still fall about 25 percent below the 2005 peak of 7.08 million. Other recent data has shown that possible relief for low housing supply is on the horizon.

"In light of the recent volatility in the stock market, it's possible some prospective buyers may err on the side of caution and delay decisions, while others may view real estate as a more stable asset in the current environment," Yun says. "Overall, the prospects for ongoing strength in the housing market remain intact for now. The U.S. economy is growing — albeit at a modest pace — and the labor market continues to add jobs."

Source: Pending Home Sales Inch Forward in July

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