Sellers' Market Drives Pending Sales to 2006 Levels

April saw the highest number for pending sales in nearly nine years thernNational Association of Realtors® (NAR) said today.  The Pending Home Sales Index (PHSI) increasedrn3.4 percent compared to a slightly upwardly revised March number, 108.7.  The Index was 14.0 percent above its level inrnthe previous April representing the largest annual increase since it rose 15.1rnpercent year-over-year in September 2012.</p

NAR notes that it was the fourth straight month the PHSI, which is based onrncontracts signed for home purchases, had increased compared to the previousrnmonth and it has risen year-over-year for eight consecutive months.  In April it was at its highest level since<bMay 2006 when it stood at 112.5.</p

Lawrence Yun, NAR chief economist, says the steady gains in contractrnactivity each month this year highlight the fact that buyer demand is strong.rn”Realtors® are saying foot traffic remains elevated this spring despiternlimited – and in some cases severe – inventory shortages in many metrornareas,” he said. “Homeowners looking to sell this spring appear to bernin the driver’s seat, as there are more buyers competing for a limited numberrnof homes available for sale.”</p

Adds Yun, “As a result, home prices are up and accelerating in manyrnmarkets.”</p

Sales of existing homes fell in April but Yun says he expects a reboundrnheading into the summer.  The likelihood ofrnmeaningful gains however will depend on an increase in inventory and evidencernof moderating price growth to offset rising interest rates.   “Thernhousing market can handle interest rates well above 4 percent as long asrninventory improves to slow price growth and underwriting standards ease tornnormal levels so that qualified buyers – especially first-time buyers – arernable to obtain a mortgage.”</p

The PHSI was up in all four regions with the Northeast and Midwestrnespecially strong.  The Northeast bouncedrnback after four straight months of decline with a 10.1 percent gain in April torn88.3, 9.4 percent higher than in April 2014. </p

In the Midwest the index increased 5.0 percent to 113.0 in April, and isrn13.3 percent above the previous year.  Pendingrnhome sales in the South rose 2.3 percent to 129.4 and are up 14.8 percent year-over-year.  The index in the West inched up 0.1 percentrnin April to 103.8, and is 16.4 percent above a year ago.</p

Total existing-home sales in 2015 are forecast to be around 5.24 million, anrnincrease of 6.1 percent from 2014. The national median existing-home price forrnall of this year is expected to increase around 6.7 percent. In 2014,rnexisting-home sales declined 2.9 percent and prices rose 5.7 percent.</p

The Pending Home Sales Index is a leading indicator based on pending salesrnof existing homes. A sale is listed as pending when the contract has beenrnsigned but the transaction has not closed, though the sale usually is finalizedrnwithin one or two months of signing.  Anrnindex of 100 is equal to the average level of contract activity during 2001,rnwhich was the first year to be examined.

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