Encouraging upswing in pending property sales in US

Pending residential property, sales in the United States increased in June following a wide swing down in April and then up in May, according to the latest data from the National Association of Realtors.

Property market activity increased in the West and South but declined in the Midwest and Northeast although all regions show strong double-digit gains from a year ago, the Pending Home Sales Index also shows.

The index, a forward looking indicator based on contract signings, increased 2.4% to 90.9 in June from 88.8 in May and is 19.8% above the 75.9 reading in June 2010, which was the low point immediately following ending of the home buyer tax credit. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said that there may be some increase in closed existing home sales. ‘For the majority of transactions, the lag time between pending contacts to actual closings is one to two months. Therefore, the two consecutive months of rising activity should lead to overall improvement in closed sales in upcoming months,’ he explained.

‘Though a higher than normal cancellation rate can hold back final closing figures, it could well be that some past cancellations are nothing more than delayed buying decisions rather than outright cancellations,’ he added.

Source: Property Community