Pending home sales increase in June; 2nd consecutive month pending home sales on the rise

Dennis Norman

The National Association of REALTORS Pending Home Sales Index for June shows an increase of 2.4 percent in the index from the month before (seasonally adjusted), and a whopping 19.8 percent increase from a year ago. This is the second month in a row that the index increased on a year-over-year basis.

Here are highlights from the report for June 2011:

  • The pending home sales index (seasonally adjusted) was 90.9 (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 2.4 percent increase from the month before and a 19.8 percent increase from a year ago.
  • The”not-seasonally adjusted” index index was 108.7, a 5.7 percent increase from the month before and a 17.3 percent increase from a year ago.
  • Two regions, the south and west, saw month over month increases and all regions saw year over year increases in pending home sales.

Lawrence Yun, NAR chief economist, said there may be some increase in closed existing-home sales. “For the majority of transactions, the lag time between pending contacts to actual closings is one to two months. Therefore, the two consecutive months of rising activity should lead to overall improvement in closed sales in upcoming months,” he said. “Though a higher than normal cancellation rate can hold back final closing figures, it could well be that some past cancellations are nothing more than delayed buying decisions rather than outright cancellations.”

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