The NAR’s Pending Home Sale index rose 6.7% over June 2008. Monthly gains (caused in large part by seasonal factors) were also up 3.6%. The biggest gains were in the South and West, regions where the foreclosure rates are the highest.
This annual number is actually a significant data point. It reflects several short term positives for Housing:
1. $8,000 tax credit (soon to be expiring)
2. ZIRP: Mortgage Rates, while up from lows, remain competitive
3. Most foreclosure moratoriums have ended; This will continue driving down prices even further, especially at the lower end of the market.
Good news: More foreclosures going forward should be stimulative of more transactions.
Bad news: July/August is the peak of transactions on a seasonal basis; Look for falling monthly sales starting in the fall through the annual January low. Also, note that once the first time tax credit is expiring, and California subsidies are being canceled due to lack of funds.
I’ll see if I can pull the trailing numbers to identify how easy or difficult the annual comparisons will be going forward.
Uptrend Continues in Pending Home Sales
National Association of Realtors, August 04, 2009