Pending home sales expanded in most of the country in July and reached their second-highest reading in over a decade, according to the National Association of REALTORS®. Only the Midwest saw a dip in contract activity last month. The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 1.3 percent to 111.3 in July from a downwardly revised 109.9 in June and is now 1.4 percent higher than July 2015 (109.8). The index is now at its second-highest reading this year after April (115.0).
Recent residential construction data shows that the size and costs of new homes have moved downward over the past year. This is an early indication that homebuilders are beginning to shift away from building larger, more expensive homes for the upper end of the market to focusing more on properties geared for buyers in the middle and lower price tiers. The homeownership rate won’t move up from its over 50-year low without a meaningful boost from first-time buyers, whose participation has yet to noticeably increase so far this year despite mortgage rates near all-time lows.
Existing-home sales this year are forecast to be around 5.38 million, a 2.8 percent increase from 2015 and the highest annual pace since 2006 (6.48 million). After accelerating to 6.8 percent a year ago, the national median existing-home price growth is forecast to be slightly moderate to around 4 percent. This information comes directly from a recent article posted on Realtor®