Lending home sales rose in May to the highest level since late 2006, implying a possible spark as mortgage interest rates began to rise, according to the National Association of Realtors.
The Pending Home Sales Index, which is a forward-looking indicator based on contract signings, increased 6.7 percent to 112.3 in May from a downwardly revised 105.2 in April, and is 12.1 percent above in May 2012 when it was 100.2. The data reflected contracts, but not closings. Contract activity is at the strongest pace since December 2006 when it reached 112.8. Pending sales have been above year-ago levels for the past 25 months.
Lawrence Yun, NAR chief economist, said, there may be a fence-jumping effect. “Even with limited choices, it appears some of the rise in contract signings could be from buyers wanting to take advantage of current affordability conditions before mortgage interest rates move higher,” he said. “This implies a continuation of double-digit price increases from a year earlier, with a
strong push from pent-up demand.”
Existing-home sales are projected to increase 8.5 to 9.0 percent, reaching about 5.07 million in 2013, the highest in seven years, slightly above the 5.03 million total recorded in 2007.
Pending home sales in the northeast were unchanged at 92.3 in May, but is 14.3 percent above a year ago. In the Midwest, the index jumped 10.2 percent to 115.5 in May and is 22.2 percent higher than May 2012. Pending home sales in the south rose 2.8 percent to an index of 121.8 in May and are 12.3 percent above a year ago. The index in the west jumped 16.0 percent in May to 109.7, but with limited inventory is only 1.1 percent above May 2012.
The National Association of Realtors, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries. For additional commentary and consumer information, visit www.houselogic.com and http://retradio.com.
All real estate agents licensed in the State of Maine belong to the Maine Association of Realtors and the National Association of Realtors.
Carrie Colby is a realtor, the broker/owner of Premier Properties in Raymond. To contact Carrie, email columnist@TheWindhamEagle.com.