Contracts to buy homes hit 3-year high
Despite the challenge of finding a home for sale, prospective buyers signed contracts for 10.3% more homes in April.
Would-be buyers signed contracts on 10.3% more new homes in April than they did a year ago, the highest number since April 2010, when a tax credit was in effect.
The National Association of Realtors’ Pending Home Sales Index, which measures contracts but not closed sales, has shown a year-over-year increase every month for the past 24 months.But the number of contracts signed fell in the West and South from the previous month, perhaps a reflection of the tight inventory of homes for sale. In the West, where bidding wars are breaking out over the limited inventory, fewer contracts were signed in April 2013 than in April 2012.
"The housing market continues to squeak out gains from already very positive conditions," Lawrence Yun, the NAR’s chief economist, said in a news release.
Yun predicted that about 5 million existing homes will be sold this year, 7% more than were sold last year. Because of the tight inventory, he expects the median home price to rise to $190,000 in 2013, an increase of 8% over 2012.
Analysts believe that, as values rise, more homeowners will put their houses and condos up for sale, easing the inventory crunch.
"We’ve got pent-up demand out there from people who put off purchasing a home; affordability remains very high," Gus Faucher, a senior economist at PNC Financial Services Group, told Bloomberg. "Housing is, and will be, an important driver of overall economic growth through the rest of 2013 and into 2014."
Looking at the numbers by region:
Northeast: up 11.5% from March, up 17.7% from April 2012.
Midwest: up 3.2% from March, up 15.1% from April 2012.
South: down 1.1% from March, up 12.3% from April 2012.
West: down 7.6% from March, down 2.6% from April 2012.