Dive Brief:
- Pending home sales rose 1.3% in July to a rate of 111.3, up from the downwardly revised level of 109.9 in June, the National Association of Realtors reported Wednesday.
- July's rate was 1.4% higher than July 2015. The Pending Home Sales Index reached its second-highest level of the year, but it has not yet reached the sky-high mark of 115.0 in April.
- Pending sales last month increased 7.3% in the West, 0.8% in the Northeast and 0.8% in the South, while sales tumbled 2.9% in the Midwest.
Dive Insight:
July pending home sales surpassed expectations, as economists surveyed by The Wall Street Journal predicted only a 0.7% bump last month.
NAR Chief Economist Lawrence Yun attributed the significant jump in July to the surge in pending home sales in the West. However, he added that tight inventory continues to limit stronger growth in the market — an ongoing concern for the residential industry.
"More home shoppers having success is good news for the housing market heading into the fall, but buyers still have few choices and little time before deciding to make an offer on a home available for sale," he said in a release. "There's little doubt there'd be more sales activity right now if there were more affordable listings on the market."
Wednesday's pending home sales data rounds out the month's residential reports, which overall were mostly positive, with the exception of a 3.2% drop in existing home sales. Builder confidence rose two points, housing starts increased 2.1% and new home sales soared 12.4%.
