Pending home sales, a gauge of what’s to come, increased 0.1 percent in May and were 6.7 percent higher than numbers seen a year ago, according to the National Association of Realtors.
While it’s seemingly normal to see pending home sales increase throughout the home buying season, it’s the first time they’ve been able to string together four consecutive months since October 2004.
“Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” said NAR Chief Economist Lawrence Yun.
By region, pending home sales increased 3.1 percent in the Northeast and 2.2 percent in the West; they fell 1.7 percent in the South and 1.3 percent in the Midwest.
“Rises in contract activity show buyers are becoming more active even as they face much more stringent loan underwriting standards. Speedy clarification of the appraisal rules could smooth a housing market recovery and support the overall economy.”
As expected, NAR took this opportunity to push for the HVCC moratorium, which they feel is hampering a housing recovery; maybe home prices just aren’t there?
Meanwhile, housing affordability fell last month from its historic high set in April as mortgage rates climbed higher.
A median-income family earning $60,800 could afford a home priced at $296,700 last month with a 20 percent down payment, assuming 25 percent of gross income is reserved for mortgage principal and interest.
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