Pending home sales rose last month, matching their highest level in two years. The National Association of Realtors reported Wednesday that contracts on existing homes were up 5.9 percent in May compared to April and up 13.3 percent compared to a year ago.
The pending home sales index reached 101.1 in March, which is its highest level since April 2010. A sale is listed as pending when the contract has been signed but the transaction has not closed. The index is based on a national sample, representing about 20 percent of transactions of existing-home sales.
“The housing market is clearly superior this year compared with the past four years,” NAR chief economist Lawrence Yun said in a statement. “The latest increase in home contract signings marks 13 consecutive months of year-over-year gains. 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.”
Yun noted that low inventory could hold back some contract activity.
“If credit conditions returned to normal and if we had more inventory, especially in the lower price ranges, more people would become successful buyers. In an environment of historically favorable housing affordability conditions, it’s frustrating to see some consumers thwarted in the process,” Yun said.
On Tuesday, Standard & Poor’s/Case-Shiller reported that home prices rose in 19 of the 20 cities surveyed. The biggest gains were in San Francisco and Washington.