The market for existing homes continued to surge in July, pushing the National Association of Realtors’ pending home sales index up 3.2% compared to the previous month to a reading of 97.6.
On an annual basis, that represents a 12% jump for the forward-looking indicator, which is based on the number of sales contracts signed in the month to purchase an existing home.
“The recovery is broad-based across many parts of the country,” noted Lawrence Yun, NAR’s chief economist. “Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit.”
In terms of regional numbers, the most active region of the country proved to be the West, where the pending home sales index increased 12.1% in July compared to the previous month to a reading of 112.5. Contract activity also improved in the South, where the regional index grew 3.1% to a reading of 103.8. Both the Northeast (down 3% to reading of 78.8) and the Midwest (off 2% for a reading of 88.1) lost a little ground on a monthly basis.
But NAR leaders and in the housing industry do worry what might happen once that federal tax credit ends Nov. 30. “Even with a good recovery taking place, the market is not yet back to normal,” said Charles McMillan, NAR’s president and a broker in Dallas-Fort Worth, who hopes Congress will extend the credit. “With a gradual absorption of inventory, we are on the cusp of a general stabilization in home prices.”
Alison Rice is senior editor, online, at BUILDER magazine.
Learn more about markets featured in this article: Dallas, TX.