More Good News From US Housing Market
That's the highest pending home sales level since 2010, and the upside is being felt in every U.S. region.
This time, it looks like the rise in home sales contracts signed is a natural one, too. In March 2010, the last time home contracts were this high, homebuyers were rushing to sign new home deals before the first time homebuyer tax credit expired.
The pending home sales data follows last week's news that California home sales -- the biggest market in the U.S. -- are up, and that new home sales, as measured by the U.S. Commerce Dept., are rising, too.
The NAR's Pending Home Sales Index is 13.3% higher than a year ago.
"The housing market is clearly superior this year compared with the past four years," noted Lawrence Yun, the NAR's chief economist in a statement. "The latest increase in home contract signings marks 13 consecutive months of year-over-year gains. Actual closings for existing-home sales have been notably higher since the beginning of the year and we're on track to see a 9 to 10 percent improvement in total sales for 2012."
The NAR predicts that the bump in home sales should be sustainable. The organization estimates that U.S. median home sales should rise by 3% in 2012, and by 5.3% in 2013.
In the Northeast, the growth rate in May was 4.8%; in the Midwest it was 6.3%; in the South, 1.1%; and in the West, 14.5%.
On a year-to-year basis, the U.S. Northeast showed the strong home sales growth rate, up 19.8% from May 2011 to May 2012. The Midwest showed solid growth, too, at 22.1%. The Western states owed the weakest growth rate, at 4.8%. All of those growth rates may continue to move up, if -- and it's a big if - banks and lenders grant more home loans, which would reduce the number of "for sale" signs on front lawns across the U.S.
"If credit conditions returned to normal and if we had more inventory, especially in the lower price ranges, more people would become successful buyers," Yun adds. "In an environment of historically favorable housing affordability conditions, it's frustrating to see some consumers thwarted in the process."
It's also going to take some time before underwater homeowners swallow a bitter pill and put their homes on the market, a scenario that Yun says is a "when" and not "if" situation.