Pending home sales continued to climb in June, sustaining two consecutive months of increases in contract activity, according to the National Association of Realtors (NAR).
The NAR’s Pending Home Sales Index (PHSI) rose 16.6% to 116.1 in June, with an index of 100 equal to the level of contract activity in 2001. Year over year, contract signings rose 6.3%.
“It is quite surprising and remarkable that, in the midst of a global pandemic, contract activity for home purchases is higher compared to one year ago,” says Lawrence Yun, NAR’s chief economist. “Consumers are taking advantage of record-low mortgage rates resulting from the Federal Reserve’s maximum liquidity monetary policy.”
Due to the housing market’s turnaround, the NAR has raised its forecast. For all of 2020, existing-home sales are expected to decline by only 3%, with sales ramping up to 5.6 million by the fourth quarter. New-home sales are projected to rise by 3%.
Each of the four major regions experienced growth in month-over-month pending home sales transactions, while the Northeast was the only region to not record increases in year-over-year pending transactions.
The Northeast PHSI grew 54.4% to 95.4 in June, but was still down 0.9% from a year ago. In the Midwest, the index rose 12.2% to 110.9 last month, up 5.1% from June 2019. Pending home sales in the South increased 11.9% to an index of 140.3 in June, up 10.3% from June 2019, and the index in the West jumped 11.7% in June to 99.6, up 4.7% from a year ago.
“The Northeast’s strong bounce back comes after a lengthier lockdown, while the South has consistently outperformed the rest of the country,” says Yun. “These remarkable rebounds speak to exceptionally high buyer demand.”
Yun says that as house hunters seek homes away from bigger cites—likely in an effort to avoid the coronavirus—properties that were once an afterthought for potential buyers are now growing in popularity.
According to data from realtor.com, metros with suburbs that most recently saw the highest gains in rankings include Columbia, S.C.; Little Rock, Ark.; Greensboro, N.C.; Tulsa, Okla.; and Cape Coral, Fla.
