The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 3.6 percent over the previous month and is 6.7 percent above June 2008, NAR reported. This is the fifth consecutive month that the pending sales index rose.
In the Northeast, the index edged higher by 0.4 percent in June and is 5.8 percent above a year ago. In the Midwest, the index increased 0.8 percent for the month and is 11.6 percent above June 2008. The index in the South climbed 7.1 percent in June and is 8.9 percent higher than a year ago. In the West, it rose 2.9 percent but is 0.2 percent below June 2008.
NAR chief economist Lawrence Yun attributes the rising index to a combination of market factors. “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” Yun says.
NAR’s Housing Affordability Index was 36.6 percentage points higher than a year ago. A family earning the national median income of $60,700 could afford a home costing $289,100 in June with a 20-percent down payment and assuming 25 percent of gross income is devoted to paying mortgage principal and interest