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US Housing Recovery: Spike in Pending Sales

As the US housing market makes its official recovery, the National Association of Realtors reports strong contract-pending figures. In fact, these figures show that pending sales haven't been this high since late 2006. This sounds good.

As we see residential contract figures on the rise and our housing market push its way back up, from a bottom-barrel recession, it looks like buyers are returning to the market. Possible reasons for this increase in pending sales include increasing mortgage interest rates, affordability, and slow-but-sure bumps in property values throughout the country. Buyers see an opportunity to purchase homes before prices get too high and possibly price them out of the market.

These pending sales numbers, from the Pending Home Sales Index, only show properties under contract, not whether those properties close or not. So, this number changes slightly for closing figures, but the activity in the market only supports a recovery and growing marketplace.

"The PHSI in the Northeast was unchanged at 92.3 in May but is 14.3% above a year ago. In the Midwest the index jumped 10.2% to 115.5 in May and is 22.2% higher than May 2012.  Pending home sales in the South rose 2.8% to an index of 121.8 in May and are 12.3% above a year ago. The index in the West jumped 16% in May to 109.7, but with limited inventory is only 1.1% above May 2012."

Overall home sales and average values are expected to increase throughout the US for the remainder of 2013, with average values expected to reach $195,000 with total sales projected at 5.07 million for 2013.

Are you seeing this kind of pending sales activity represented in your area? Do these figures affect your decision to buy, sell, or invest in the current market in your area? Let us know your thoughts, answers, and ideas in the comment section below.

Photo Courtesy of Bunches and Bits {Karina}’s Flickr

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