Sunday
November 23, 2014

NAR: ‘An Uptrend’ in Closing Sales Ahead

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NAR: ‘An Uptrend’ in Closing Sales Ahead

Pending home sales rose slightly in April, largely driven by gains in the Midwest and Northeast, according to the National Association of REALTORS®’ latest Pending Home Sales Index, which is a forward-looking indicator based on contract signings.  It marked the second consecutive month of gains for pending home sales. 

Overall, pending home sales nationwide rose 0.4 percent in April, but remain 9.2 percent below year ago levels. 

“Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective home buyers’ confidence,” says Lawrence Yun, NAR’s chief economist. “An uptrend in closed sales is expected, although months will encounter a modest setback.” 

Regional Snapshot

Here’s an overview of how pending home sales fared in April across the country: 

  • Northeast: pending home sales rose 0.6 percent in April but are 12 percent below year ago levels, according to the PHSI. 
  • Midwest: pending home sales rose 5 percent last month but are 6.9 percent below April 2013. 
  • South: pending home sales dropped 0.6 percent and are 6.4 percent below year ago levels. 
  • West: pending home sales fell 2.9 percent and are 15 percent below April 2013 levels.

Forecasts

NAR has made the following projections with sales and home prices through 2015: 

  • Sales: With sluggish activity in the first quarter, NAR is projecting existing-home sales to be lower this year than last. NAR is projecting existing sales to fall below the nearly 5.1 million they were in 2013. However, existing-home sales are projected to near 5.3 million in 2015. 
  • Price: The median on the existing-home price is projected to increase between 5 and 6 percent this year, and then by 4 to 5 percent in 2015. 
  • Mortgage rates: The 30-year fixed-rate mortgage is expected to increase and average 5.5 percent next year.  

“The extent to which higher mortgage interest rates will impact housing affordability and sales depends on income growth, ongoing improvement in the labor market and any change to mortgage underwriting conditions,” Yun says. 

Source: National Association of REALTORS®

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