WASHINGTON (dpa-AFX) - Reflecting current favorable conditions, the National Association of Realtors released a report on Tuesday showing pending home sales in the U.S. spiked by much more than expected in the month of June.
NAR said its pending home sales index surged up by 2.8 percent to 108.3 in June after jumping by 1.1 percent to 105.4 in May. Economists had expected pending home sales to rise by 0.5 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
With the much bigger than expected monthly increase, pending home sales in June were up by 1.6 percent compared to the same month a year ago, snapping a 17-month streak of annual decreases.
NAR chief economist Lawrence Yun said the sharp increase in pending home sales is likely the start of a positive trend for home sales.
'Job growth is doing well, the stock market is near an all-time high and home values are consistently increasing,' Yen said. 'When you combine that with the incredibly low mortgage rates, it is not surprising to now see two straight months of increases.'
The jump in pending home sales reflected growth in all four regions, with pending sales in the West soaring by 5.4 percent.
Pending home sales in the Midwest and Northeast also surged up by 3.3 percent and 2.7 percent, respectively, while pending sales in the South increased by 1.3 percent.
Last week, separate reports from NAR and the Commerce Department showed a sharp pullback in existing home sales but a substantial rebound in new home sales.
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