Pending Home Sales Soar 6.7 Percent to 6-Year High

By Qiong (June) Zhang48 Comments

Signed contracts to buy previously owned homes rose to the highest level in six years. Rising interest rates may be causing some buyers who were on the fence to get in quickly before they are priced out.

The Pending Home Sales Index from the National Association of Realtors rose 6.7% in May from April, and is now up 12.1% from a year ago. A shortage of homes for sale has weighed on the market this year, even as demand increases. Contracts to buy newly built homes rose to a five-year high in May, according to the U.S. Census.

The average rate on the 30-year fixed conforming mortgage is up about 100 basis points from the beginning of May to around 4.5%. The rate spike the most in the past week, before these May contracts were signed.

Pending sales were highest in the West, where prices jumped the highest. . The index in the West rose 16% monthly but is just 1.1% higher than it was a year ago, due to limited inventory.

The index was unchanged in the Northeast in May month-to-month, but was 14.3% higher from a year ago. In the Midwest, sales jumped 10.2% monthly and were 22.2% higher than in May 2012. The South saw a 2.8% monthly gain, and is 12.3% above a year ago.


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