Following reports of surging new home sales and rising existing home sales last month, national pending home sales soared to the highest level in more than a decade.
A forward-looking indicator of pending home sales that reflects contract signings for residential properties, the Pending Home Sales Index, was 116.3 in April.
Based on historical data, last month’s contract signings for pre-owned homes turned out to be at the highest level since February 2006, when the index came in at 117.4.
The seasonally adjusted index, which is published by the National Association of Realtors, was
an upwardly revised 110.7 in March 2016.
In April 2015, the index
was 111.2.
“The ability to sign a contract on a home is slightly exceeding expectations this spring even with the affordability stresses and inventory squeezes affecting buyers in a number of markets,” NAR Chief Economist Lawrence Yun stated in the announcement. “The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market.”
Last month’s robust activity comes as April’s new home sales jumped 27 percent from a year earlier and existing home sales were up 5 percent.
Pending home sales in the West jumped more than 11 percent from a month earlier, leaving the index there at a seasonally adjusted 106.2
A nearly 7 percent rise from March left last South’s index at 133.9, while a more than 1 percent month-over-month gain put the index for the Northeast at 98.2.
The Midwest saw the only index decline last month — less than 1 percent — to 112.9.
“Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search,” Yun added.
The economist projects that full-year 2016 existing home sales will reach 5.41 million, up 3 percent from last year.
