Pending home sales rose 2.4 percent in June, exceeding expectations and providing some bright news for the persistently weak housing market, according to data released by the National Association of Realtors on Thursday.
Economists surveyed by Bloomberg had predicted a 2.0 percent decrease in pending home sales. Instead, pending sales climbed and all regions showed strong double-digit gains from the previous June, which was a low point after the homebuyer tax credit expired.
While this is good news, pending home sales reflect signed contracts—not closings. But NAR chief economist Lawrence Yun said he expects an improvement in closed sales in the coming months. “Though a higher than normal cancellation rate can hold back final closing figures, it could well be that some past cancellations are nothing more than delayed buying decisions rather than outright cancellations,” Yun said.
He cautioned that Washington “should not rock the boat with policy changes that would negatively impact affordable credit or otherwise increase the cost of buying or owning a home.”
The strong June report is the second piece of good news for the recovery on Thursday. Earlier in the morning, initial jobless claims dropped below the key 400,000 level for the first time in fifteen weeks.
This article appears in the July 28, 2011 edition of National Journal Daily PM Update.