Pending Home Sales moved up for the fifth month in a row

Posted on July 7, 2015 Updated on July 7, 2015

In May, those in the real estate business found lots of new people they might eventually make friends with. Pending Home Sales moved up for the fifth month in a row, hitting a nine-year high. The National Association of Realtors (NAR) measure of contracts signed on existing homes hasn’t been at this level of activity since April 2006. The NAR says this indicates that home sales are likely off to their best year since the downturn. In addition, the NAR’s chief economist noted, “It’s very encouraging to now see a broad-based recovery, with all four major regions showing solid gains from a year ago, and new home sales also coming alive.”

But the NAR economist also worries about affordability, thanks to the rise in home prices brought on by this year’s stronger sales combined with flat housing supply levels. He observes, “Without meaningful gains in new and existing supply, there’s no question the goalpost will move further away for many renters wanting to become homeowners.”  Indeed, the latest Standard & Poor’s/Cash-Shiller U.S. Home Price Index pegged prices up again for the month in April and 4.2% ahead of April a year ago. Fortunately, prices aren’t moving up as fast as they once did. The chairman of S&P’s Index Committee confirmed, “Home prices continue to rise across the country, but the pace is not accelerating.”