Pending Sales Rise As Purchase Power Grows
Pending home sales increased for the second consecutive month, according to new numbers from the National Association of Realtors. Their Pending Home Sales Index – which measures the number of contracts to buy homes signed each month – saw a 1.5 percent improvement over the month before. Signed contracts are now 3.9 percent higher than last year at the same time. Lawrence Yun, NAR's chief economist, says historically low mortgage rates are the main factor driving sales right now. “Even though home prices are rising faster than income, national buying power has increased by 6 percent because of better interest rates,” Yun said. “Furthermore, we've seen increased foot traffic as more buyers are evidently eager searching to become homeowners.” But while low mortgage rates are helping to offset price increases, affordability levels are largely dependent on inventory. And Yun says more new home construction is the answer to balancing housing supply with the growing demand for homes. As the number of available homes for sale rises, price increases will slow and home buyers will have more options to choose from. More here.