by Calculated Risk on 6/27/2013 10:06:00 AM

From the NAR: May Pending Home Sales Reach Highest Level in Over Six Years

The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 6.7 percent to 112.3 in May from a downwardly revised 105.2 in April, and is 12.1 percent above May 2012 when it was 100.2; the data reflect contracts but not closings.

Contract activity is at the strongest pace since December 2006 when it reached 112.8; pending sales have been above year-ago levels for the past 25 months.
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The PHSI in the Northeast was unchanged at 92.3 in May but is 14.3 percent above a year ago. In the Midwest the index jumped 10.2 percent to 115.5 in May and is 22.2 percent higher than May 2012. Pending home sales in the South rose 2.8 percent to an index of 121.8 in May and are 12.3 percent above a year ago. The index in the West jumped 16.0 percent in May to 109.7, but with limited inventory is only 1.1 percent above May 2012.

Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in June and July.

With limited inventory at the low end and fewer foreclosures, we might see flat existing home sales going forward (the NAR is forecasting a 9% increase this year to 5.07 million sales).