As a sign there may be more positive homebuying activity in the future, pending home sales rose in May, according to the National Association of Realtors. The real estate organization pinpointed lower mortgage rates and a larger inventory of homes as the cause for May's figures.
Pending sales are the number of contract signings. The Pending Home Sales Index rose 6.1 percent from April to a reading of 103.9, the biggest month-over-month rise since April 2010's 9.6 percent gain. While this monthly increase is high, the index is still 5.2 percent below May 2013's 109.6. Lawrence Yun, chief economist for the NAR, said that sales could continue to grow for the rest of the year.
"Sales should exceed an annual pace of five million homes in some of the upcoming months behind favorable mortgage rates, more inventory and improved job creation," Yun said.
He went on to say that more homes changing hands may not do enough to make up for the lack of sales in the first quarter of 2014, and the sales total for the year may fall short of 2013's amount.
The PHSI for the four major regions in the country rose during May compared to April. The Northeast index was up 8.8 percent to 86.3, while the Midwest index increased 6.3 percent to 105.4. The West index jumped 7.6 percent to 95.4 and the South was up 4.4 percent to 117.
Robert Hull, chief financial officer at Lowe's Home Improvement, said at a conference, per Bloomberg, that while home sales have been fluctuating for the better part of the year, home appreciation has done better.