The National Association of Realtors Thursday morning reported "some improvement..for existing-home sales in the months ahead" as it released its Pending Home Sales Index for June, which rose 5.3% to 89.0 from a downwardly revised reading of 84.5 in May. The index is still 12.3% below June 2007's 101.4.
"The vacillation of data from one month to the next indicates a housing market in transition," said Lawrence Yun, NAR chief economist. "The rise in pending home sales was broad-based with all four regions showing gains.This is welcome news because a rise in contract activity is necessary for an overall housing recovery."
The PHSI in the South jumped 9.3% to 92.4 in June, 16.6% below June 2007.In the West, the index rose 4.6% to 101, 1.7% below a year ago. The index in the Northeast increased 3.4% to 79.6, 15.4% below June 2007. In the Midwest, the index rose 1.3% in June to 79.6 but is 13.3% below a year ago.
The Realtor group cited increased sales in individual markets that have ben hard hit during the housing downturn, including Sacramento, Las Vegas and Ft. Myers. It also said the pickup in contract signings appears to be broadening in Columbus, Charleston, W.V., Oklahoma City and Colorado Springs. However, NAR added that pending sales have fallen significantly in Texas markets and in the Pacific Northwest, two regions with strong local economies.
NAR now forecasts existing-home sales to rise 7.0% to 5.51 million in 2009 from 5.15 million this year. Prices are expeted to rise between 3% and 6% next year.
The Realtor's forecast for new-home sales was less sunny. The NAR expects new-home sales to bottom "around second quarter" 2009. It is projected sales of new homes for 2008 to come in at 509,000, then drop 8.8% to 464,000 in 2009. "Builders need to further cut production to help trim inventory," said Yun.
The NAR expects housing starts, including multifamily units, to fall 17.2% next year to 795,000 from 960,000 in 2008.