Pending Homes Sales Increase 16.6% in June

The National Association of Realtors® (NAR) is reporting that their Pending Homes Sales Index (PHSI) for June increased 16.6%, to a reading of 116.1. Year-over-year, contract signings rose 6.3%. An index of 100 is equal to the level of contract activity in 2001. The PHSI is a leading indicator of housing activity, measures housing contract activity, and is based on signed real estate contracts, not actual closings, for existing single-family homes, condos, and co-ops. In prepared remarks Lawrence Yun, NAR’s chief economist said, “It is quite surprising and remarkable that, in the midst of a global pandemic, contract activity for home purchases is higher compared to one year ago. Consumers are taking advantage of record-low mortgage rates resulting from the Federal Reserve’s maximum liquidity monetary policy.” In light of the apparent housing market turnaround, NAR has raised it forecasts for the markets. For all of 2020, existing-home sales are expected to decline by only -3%, with sales ramping up to 5.6 million by the fourth quarter. New home sales are projected to rise by 3%.