SEATTLE NEWS ARCHIVES & FEATURES
Pendulum continues: Pending sales rise in June
Jul 28, 2011, 10:02 AM | Updated: Mar 4, 2016, 5:59 am
Pending home sales increased in June following a wide swing down in April and then up in May, according to the National Association of Realtors.
The nation’s largest trade association, which has more than 1.2 million members, said its pending home sales index, which is based on contracts signed, increased 2.4 percent to 90.9 for June from 88.8 for May. NAR said the index is 19.8 percent higher than 75.9 for the year-ago period.
Lawrence Yun, NAR’s chief economist, said the strong pending home sales gains of the past few months bode well for coming data on existing homes sales.
“For the majority of transactions, the lag time between pending contacts to actual closings is one to two months,” Yun said. “Therefore, the two consecutive months of rising activity should lead to overall improvement in closed sales in upcoming months.”
Tightened lending standards and continued global financial uncertainty remain drags on the housing economy, according to Yun, who also wants policymakers to shy away from regulations that impact homeownership opportunities.
“The best way to ensure a more solid recovery in housing is to simply return to normal, sound credit standards so more creditworthy homebuyers can get a mortgage,” Yun said. “Washington also should not rock the boat with policy changes that would negatively impact affordable credit or otherwise increase the cost of buying or owning a home.”
Leading the pending homes sales was the West region (6.4 percent) followed by the South (4.4 percent). NAR expects 5 million existing home sales in 2011, a slight increase from last year.
Doug Duncan, Fannie Mae’s chief economist, said while the pending home sales data portends a stabilizing market in coming months.
“However, caution should be exercised regarding this upward trend in contract signings, as these have not yet materialized into closings, which dropped in June for the third consecutive month,” Duncan said. “Low appraisals compared to contract prices and heightened uncertainty about the economic recovery may have led to increased numbers of contract cancellations.”
