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Pending Home Sales Index Continues Upward Climb07-08-15 | News

Pending Home Sales Index Continues Upward Climb

The PHSI reaches 112.6 in May, the best reading since it hit 113.7 in April 2006.

Contract activity for home sales has been on the rise for five consecutive months and settled at a level not seen in more than nine years, the National Association of Realtors said.

The Pending Homes Sales Index rose in May to 112.6, the highest it's been since April 2006 when it hit 113.7, the NAR said in a news release.

May's PHSI is an increase of 0.9 percent over April, and is also 10.4 percent higher on a year-over-year basis. PHSI data is based on sales contracts that have been signed but not yet closed. An index of 100 is equal to the average level of contract activity in 2001, the year the index was created.

The latest PHSI bodes well for the housing industry heading into the second half of 2015, Lawrence Yun, chief economist for the NAR, said.

"The steady pace of solid job creation seen now for over a year has given the housing market a boost this spring," Yun said. "It's very encouraging to now see a broad-based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive."

The breakdown by region is as follows:

• In the Northeast, the PHSI increased 6.3 percent to 93.9 in May. It is now 10.6 percent
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• The Midwest declined 0.6 percent to 111.4, but is still 7.8 percent above the same month in 2014.
• In the South, the index decreased 0.8 percent to 127.8, but is still 10.6 percent higher year-over-year.
• The West rose 2.2 percent to 104.5. This is 13.0 percent above the same month of a year ago.