While the National Association of Realtors released a report on Thursday showing pending home sales in the U.S. rose for the sixth time in seven months in July, the pace of growth fell short of economist estimates.
NAR said its pending home sales index rose 0.5 percent to 110.9 in July from an upwardly revised 110.4 in June. Economists had been expecting the index to climb by 1.0 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
The index is up by 7.4 percent compared to the same month a year ago, reflecting the eleventh consecutive month of year-over-year growth.
Lawrence Yun, NAR chief economist, said, “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.
“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.,” he added.
The modest increase in pending home sales in July was largely due to the strength in the Northeast, where pending home sales jumped 4.0 percent.
Pending home sales in the South showed a more modest 0.6 percent increase, while the index for the Midwest was unchanged and pending home sales in the West declined 1.4 percent.
Looking ahead, Yun said he expects the national median existing home price to increase 6.3 percent in 2015 to $221,400.
Yun also forecast total existing home sales to increase 7.1 percent this year to around 5.29 million, about 25 percent below the prior peak set in 2005.
Last Thursday, NAR released a separate report showing that existing home sales unexpectedly saw continued growth in the month of July.
NAR said existing home sales climbed 2.0 percent to an annual rate of 5.59 million in July from a downwardly revised 5.48 million in June.
The continued increase came as a surprise to economists, who had expected existing home sales to drop to a rate of 5.40 million from the 5.49 million originally reported for the previous week.
With the unexpected increase, existing home sales rose to their highest level since reaching 5.79 million in February of 2007.
The material has been provided by InstaForex Company – www.instaforex.com