Pending US home sales at nine-year high
29 May 2015 - 11:46PM
Property
Photo: Fifth World Art
Pending sales of US homes have risen to their
highest level in nine years.New figures from the National
Association of Realtors show that pending sales increased 3.4 per
cent to 112.4 in April from a slight upward revision of 108.7 in
March. Pending sales have now risen for four months in a row and
are 14 per cent above April 2014 — the largest annual increase
since September 2012. The index has now increased year-over-year
for eight consecutive months and is at its highest level since May
2006.Lawrence Yun, NAR chief economist, says the steady gains in
contract activity each month this year highlight the fact that
buyer demand is strong."Realtors are saying foot traffic remains
elevated this spring despite limited — and in some cases severe —
inventory shortages in many metro areas," says Yun."Homeowners
looking to sell this spring appear to be in the driver’s seat, as
there are more buyers competing for a limited number of homes
available for sale. As a result, home prices are up and
accelerating in many markets."Following April’s decline in
existing-home sales, Yun expects a rebound heading into the summer,
but the likelihood of meaningful gains will depend on a much-needed
boost in inventory and evidence of moderating price growth now that
interest rates have started to rise."The housing market can handle
interest rates well above 4 percent as long as inventory improves
to slow price growth and underwriting standards ease to normal
levels so that qualified buyers — especially first-time buyers —
are able to obtain a mortgage."Total existing-home sales in 2015
are forecast to be around 5.24 million, an increase of 6.1 per cent
from 2014. The national median existing-home price for all of this
year is expected to increase around 6.7 perc ent. In 2014,
existing-home sales declined 2.9 per cent and prices rose 5.7 per
cent.
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