A gauge of pending home sales rose 3.3 per cent in July to reach the highest level in 11 months, signaling that upcoming closings of existing homes are likely to speed up, the National Association of Realtors reported Thursday.
The index of pending home sales hit a seasonally adjusted 105.9 in July, compared with 102.5 in June.
Home Sales, Prices, US
Low mortgage rates, moderating home-price growth and more homes for sale are all supporting deals, NAR said.
The data showed the supply of homes at the current sales rate rose to 6 months, the highest since October 2011, from 5.6 months in June. There were 205,000 new houses on the market at the end of July, the most in almost four years.
In July the pending-sales gauge was down 2.1 per cent from a year earlier. By region, July’s gauge of pending home sales rose 6.2 per cent in the Northeast, 4.2 per cent in the South and 4 per cent in the West. Meanwhile, the gauge declined 0.4 per cent in the Midwest. Pending sales typically close within two months. An index reading of 100 equals 2001’s average contract activity level.
Meanwhile, new home sales fell another 2.4 per cent to an annual rate of 412,000 in July, down 10,000 from an upwardly revised June figure of 422,000, the US Census said Monday.
The last three months of sales averaged the same as the annual figure for 2013 at 429,000 — but in contrast to the first two months of the year that averaged 445,000 and the last quarter of 2013 that averaged 446,000. Most of the July drop was concentrated in the West, which dropped 16,000 sales on an annual basis.
New home inventory did increase again, rising to 205,000, up 4.1 per cent over June and the highest since September 2010.
Sales prices rose 2.9 per cent year-over-year as the composition of sales in the US$150,000 to US$199,999 segment increased and the share of homes sold for over US$500,000 fell.
This report is in contrast to the NAHB/Wells Fargo Housing Market Index that rose 2 points to 55 in August for the second consecutive month above 50.
Sales of new properties have averaged 429,000 over the last three months, in line with the 2014 average.
A decline in borrowing costs this year is providing some support. The average 30-year, fixed-rate mortgage was 4.1 per cent in the week ended August 21, down from 4.53 per cent at the start of January, according to data from Freddie Mac.