Pending home sales increased 0.5% in July compared with June to reach an index score of 110.9 on the National Association of Realtors' (NAR) Pending Home Sales Index.
Year over year, pending home sales were up 7.4% compared with July 2014.
Pending home sales as of July had risen for 11 consecutive months on a year-over-year basis, according to NAR.
In a release, Lawrence Yun, chief economist for NAR, says it was good to see the housing market begin the second half on a positive note.
‘Led by a solid gain in the Northeast, contract activity in most of the country held steady last month, which bodes well for existing sales to maintain their recent elevated pace to close out the summer,’ Yun says. ‘While demand and sales continue to be stronger than earlier this year, Realtors have reported since the spring that available listings in affordable price ranges remain elusive for some buyers trying to reach the market and are likely holding back sales from being more robust.’
Although inventory shortages are likely to persist, the national median existing-home price is expected to increase 6.3% by the end of this year to $221,400, NAR forecasts.
What's more, NAR forecasts that total existing-home sales this year will increase 7.1% to an annual rate of about 5.29 million. This is about 25% below the prior peak of 7.08 million set in 2005.
‘In light of the recent volatility in the stock market, it's possible some prospective buyers may err on the side of caution and delay decisions, while others may view real estate as a more stable asset in the current environment,’ Yun says. ‘Overall, the prospects for ongoing strength in the housing market remain intact for now. The U.S. economy is growing – albeit at a modest pace – and the labor market continues to add jobs.
‘Uncertainty in the equity markets – even if the Fed raises short-term rates in September – could stabilize long-term mortgage rates and preserve affordability for buyers,’ he adds.
Regionally, pending home sales increased 4.0%, month over month, in the Northeast and increased 0.6% in the South. Pending home sales were flat in the Midwest, month over month, while they decreased 1.4%.