Pending US home sales have rise in four of the last five months, according to new figures, as the market continues to be favourable for both buyers and sellers.
After a slip in June, sales rebounded in July 2014, according to the National Association of Realtors. Pending transactions jumped 3.3 per cent month-on-month to their highest level since August 2013, as improving finances encourage buyers to snap up the inventory on the market, while sellers continue to list more real estate for sale.
Lawrence Yun, NAR chief economist, explains that steady job additions to the economy are helping family finances and giving them added confidence to enter the market.
"Interest rates are lower than they were a year ago," he adds, "price growth continues to moderate and total housing inventory is at its highest level since August 2012," he said.
Indeed, sellers continue to place homes on the market, keen to ride the new wave of positive sentiment. This increase in the number of new and existing homes for sale, though, is helping to moderate house prices, as the market finds a natural, more stable plateau, following a year of booming values and demand.
The increased supply level is "creating less competition and giving prospective buyers more time to review their options before submitting an offer", considers Yun.
Indeed, with the market cooling down from its fevered period, pending sales are currently 2.1 percent below the levels they experienced one year ago. Nonetheless, the NAR reports above average activity levels for the third month in a row across the country, with all major regions experiencing "healthy gains" except for the Midwest, which saw a slight decline.
The Pending Home Sales Index in the Northeast jumped 6.2 per cent in July month-on-month, while pending sales in the South increased 4.2 per cent. The West saw sales rise 4 per cent but remains 60 percent below July 2013.
Yun expects existing-homes sales to be down 2.1 per cent this year overall to 4.98 million, compared to 5.09 million sales of existing homes in 2013. The national median existing-home price is projected to grow between 5 and 6 percent this year and 4 and 5 percent next year.
Photo: Stephan Rebernik