By: Dennis Norman
Lawrence Yun, Chief Economist, NAR
The National Association of REALTORS(R) issued their Pending Home Sales Index Report for May which showed a very modest increase of 0.1% on the index, over April, however May marks the fourth month in a row the index has increased. It was almost five years ago (October, 2004) the last time this index had four consecutive monthly gains.
Lawrence Yun, NAR chief economist, does give caution though about the time it may take these sales to result in closings saying “closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions.” So once again, it appears Home Valuation Code of Conduct (HVCC)is in the spotlight. Yun goes on to say “rises in contract activity show buyers are becoming more active even as they face much more stringent loan underwriting standards. Speedy clarification of the appraisal rules could smooth a housing market recovery and support the overall economy.”
May’s pending home sales index shows significant gain from a year ago, with a 6.7% increase. The Northeast region had the largest increase over April at 3.1% followed by the West at 2.2%. The South and Midwest regions both saw decreased activity from April, down 1.7% and 1.3% respectively.
Homes continue to remain very affordable according to the National Association of REALTORS(R) housing affordability index for May. The household income necessary to buy a median priced home in the U.S. has dropped over 25% in the past year, down to $35,424.00.
To see an interview with Lawrence Yun by REALTOR(R) Magazine click on the video below.
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