Pending Home Sales Rise for 3rd Straight Month to 15-Year High

Pending home sales marked three consecutive months of growth in July, the National Association of Realtors reported yesterday, with all four major regions reporting gains in both month-over-month and year-over-year transactions.

The Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, rose by 5.9% to 122.1 in July, its highest level since 2004. Year-over-year, contract signings rose 15.5%.

All four regional indices recorded increases in contract activity on a month-over-month basis in July. In the Northeast, pending home sales jumped by 25.2% to 112.3 in July and improved by 20.6% from a year ago. In the Midwest, the index rose by 3.3% to 114.6 last month and improved by 15.4% from a year ago.

Pending home sales in the South increased by 0.9% to 142.0 in July and improved by 14.9% from a year ago. The index in the West rose by 6.8% in July to 106.4 and improved by 13.2% from a year ago.

“We are witnessing a true V-shaped sales recovery as homebuyers continue their strong return to the housing market,” said Lawrence Yun, NAR chief economist. “Home sellers are seeing their homes go under contract in record time, with nine new contracts for every 10 new listings.”

Yun noted prospective buyers missed most of the spring buying season due to pandemic-induced lockdown measures. With nearly all states at least partially reopened, the market is experiencing robust activity from the pent-up demand. He said there are “no indications” that contract activity will wane in the immediate future, particularly in the suburbs.