After a month-to-month dip in April, pending sales of existing homes jumped back to a two-year high in May, according to the National Association of Realtors’ latest Pending Home Sales Index released this week.
The index, which represents contracts signed but not yet closed, rose a seasonally adjusted 5.9 percent from April to May, to 101.1 — the same index level as in March and the highest index level since April 2010, when the deadline for a federal homebuyer tax credit program was fast approaching. The index was 111.3 then.
An index score of 100 is equal to the average level of sales contract activity in 2001, a robust year for home sales and the first year examined by the trade group. Contracts signed in May typically close one or two months later.
“The housing market is clearly superior this year compared with the past four years,” said Lawrence Yun, NAR’s chief economist, in a statement.
“Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10 percent improvement in total sales for 2012.”
The index reached its highest level in the West: 108.7. Pending sales were up 7.1 percent from a year ago.
NAR’s latest economic outlook predicts a 9.5 percent jump in existing-home sales this year, to 4.66 million, followed by an estimated 6.9 percent increase in 2013, to 4.99 million. The trade group also anticipates new-home sales will rise 29 percent in 2012, to 388,000, and a whopping 62 percent in 2013, to 629,000.
These numbers seem to show that talk of slow but steady real estate recovery may not be foolish. If the industry continues to see this type of growth, real estate agents may be in for a better next few years than last few years.