Home sales activity in July down from month before; still better than last year

Dennis Norman

The National Association of REALTORS Pending Home Sales Index for July shows, after two consecutive months of increases, a decrease of 1.3 percent in the index from the month before (seasonally adjusted), and a 14.4 percent increase from a year ago (last month’s index was up 19.8 percent from the year before).

Here are highlights from the report for July 2011:

  • The pending home sales index (seasonally adjusted) was 89.7 (the index is based upon 100.0 being equal to the average level of sales activity in 2001 which we could call the last “normal” year) which is a 1.3 percent decrease from the month before and a 14.4 percent increase from a year ago.
  • The”not-seasonally adjusted” index index was 94.0, a 13.5 percent decrease from the month before and a 10.1 percent increase from a year ago.
  • The west was the only region this month that had a month over month increase and all regions saw year over year increases in pending home sales.

Lawrence Yun, NAR chief economist, said “sales activity is underperforming (uh, no duh…sorry, editorial comment). The market can easily move into a healthy expansion if mortgage underwriting standards return to normalcy. We also need to be mindful that not all sales contracts are leading to closed existing-home sales. Other market frictions need to be addressed, such as assuring that proper comparables are used in appraisal valuations, and streamlining the short sales process.”

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