Pending home sales in the U.S. rebounded by much more than anticipated in the month of May, according to a report released by the National Association of Realtors on Wednesday, with pending sales matching the highest level in the past two years.
NAR said its pending home sales index jumped 5.9 percent to 101.1 in May after falling 5.5 percent to 95.5 in April. Economists had expected pending home sales to show a much more modest 1.2 percent increase.
A pending 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 bigger than expected increase, the index matched the reading seen in March, which is the highest level since April of 2010.
NAR noted that the high seen in April of 2010 came as buyers were rushing to beat the deadline for the home buyer tax credit.
The report also showed that the reading for May was 13.3 percent above the reading seen in the same month a year ago, reflecting the thirteenth consecutive month of year-over-year growth.
Lawrence Yun, NAR chief economist, said, "Actual closings for existing-home sales have been notably higher since the beginning of the year and we're on track to see a 9 to 10 percent improvement in total sales for 2012."
The increase in pending home sales reflected growth in all four regions of the country, with the West showing a particularly strong 14.5 percent increase.
Pending home sales in the South edged up by a more modest 1.1 percent, while pending sales in the Midwest and the Northeast rose by 6.3 percent and 4.8 percent, respectively.
"Today's figure is the last of the May housing data seen over the past week and signs still point to an industry trying to keep its head above water after a miserable 5 years," said Peter Boockvar, managing director at Miller Tabak. "Getting out of the water though will still take a lot of patience and time."
Monday morning, the Commerce Department released a report showing a bigger than expected increase in U.S. new home sales in the month of May.
The report showed sales of new single-family homes at a seasonally adjusted annual rate of 369,000 in May, a 7.6 percent increase from the revised April rate of 343,000. Economists had expected new home sales to climb to 350,000.
Last Thursday, NAR released a separate report showing a slightly bigger than expected drop in existing home sales in May, although Yun said the drop was more likely due to supply constraints rather than softening demand.
NAR said existing home sales fell by 1.5 percent to a seasonally adjusted annual rate of 4.55 million in May from 4.62 million in April. Economists had expected a slightly more modest decrease to an annual rate of 4.57 million.
by RTT Staff Writer
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