Pending home sales displayed another month of positive contract activity in July, marking three consecutive months of growth, according to the National Association of Realtors (NAR).
The NAR’s Pending Home Sales Index (PHSI) rose 5.9% to 122.1 last month, while year-over-year contract signings rose 15.5%. In addition, each of the four major regions saw gains in both month-over-month and year-over-year pending home sales transactions.
“We are witnessing a true V-shaped sales recovery as home buyers continue their strong return to the housing market,” says Lawrence Yun, NAR’s chief economist. “Home sellers are seeing their homes go under contract in record time, with nine new contracts for every 10 new listings.”
According to Yun, prospective buyers missed most of the spring buying season due to the onset of the pandemic. With nearly all states at least partially reopened, the market is experiencing robust activity from the pent-up demand, particularly in the suburbs.
Yun predicts existing-home sales to ramp up to 5.8 million in the second half. The expected rebound would bring the full-year level of existing-home sales to 5.4 million, a 1.1% gain compared with 2019.
“Anecdotally, Realtors are telling me there is no shortage of clients or home seekers, but that scarce inventory remains a problem,” Yun said. “If 20% more homes were on the market, we would have 20% more sales, because demand is that high.”
Plus, Yun projects existing-home sales to reach 5.86 million in 2021, supported by an economy that he expects to expand by 4% and a low-interest-rate environment, with the 30-year mortgage rate average of 3.2%.
