Eye On Housing
According to the National Association of Realtors’ Pending Home Sales Index (PHSI), nationwide, signed contracts for existing homes inched up 0.2% over the month of June 2016. The PHSI is forward looking indicator for contracting closings (i.e. existing home sales). June marks the fourth monthly increase in the PHSI over the past five months. Over the year, the PHSI rose by 1.0%. With this improvement, the PHSI is now at its second highest reading over the past 12 months, but is noticeably down from this year’s peak level in April.
Regionally, the nationwide increase signed contracts over the month of June reflected growth in the Northeast and in the West. The PHSI in the Northeast led the way, advancing by 3.2% over the month and by 1.7% for the year. Meanwhile, the PHSI for the Midwest increased 0.8% during the month of June and by 1.6% over the past 12 months.
The gains over the month of June in the Northeast and the Midwest were partially offset by monthly declines in the South, 0.6%, and the West, 1.3%. However, while the PHSI for the South partly offset the month-over-month gains in the Northeast and the Midwest, a growth rate of 1.7% for the past year contributed to the annual increase in the PHSI from these other two regions. In contrast, the PHSI in the West fell over the month by 1.3% and declined over the past year by 1.8%.
Recent developments in existing home sales indicate that the market continues to heal. Existing home sales, as reported by the National Association of Realtors (NAR), increased 1.1% in June to the highest level since February 2007. June existing sales are up 3.0% from the same month a year ago. First-time homebuyers grabbed 33% of existing home sales, the best performance in four years while the distressed sales share was 6% in June down from 8% a year ago. Individual investors purchased an 11% share in June, down from 13% last month, and the lowest share since July 2009.
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