Pending home sales, a key leading indicator for the resale sector, were up in June for the fifth consecutive month, according to the National Association of Realtors.
The last time there were five straight monthly gains was in July 2003. The index, a forward-looking indicator based on signed contracts that have not yet closed, rose to 94.6, up 3.6% from an upwardly revised reading in May and 6.7% above June 2007.
NAR Chief Economist Lawrence Yun said the latest figures are yet another indication that "sales have bottomed out," and that "buyers recognize it." And he expects "the momentum to continue to build."
But sales are far from even. Fueled by first-time buyers and investors, most of the activity is in the lower price ranges, which Mr. Yun said "are selling briskly." On the other hand, there is a 20-month inventory of unsold houses offered at $1 million or more.
Indeed, the stock of big, expensive for-sale houses is the largest it's been in a year. The index rose from May to June in all four regions, with the South recording the biggest gain.
Although it is normal for some pending sales to fall by the wayside because buyers can't qualify for financing or appraisals come in too low, the NAR economist expects existing-home sales to gradually rise over the balance of the year, with conditions varying around the country. "It appears home sales are on a sounder footing and inventory is gradually being absorbed," he said.