Economy Watch: Pending Home Sales See Uptick
- Apr 29, 2014
Housing numbers have been trending negative lately, at least in terms of sales (prices are still going up), but the National Association of Realtors reported on Monday that after months of going nowhere, its pending home sales rose in March. In fact, it was the first upward movement for the forward-looking index in the past nine months, according to the organization.
The NAR pending home sales index came in at 97.4 for the month, compared with an upwardly revised 94.2 in February. That’s an improvement, but the index is nevertheless down from March 2013, when it stood at 105.7. Still, the ever-optimistic NAR chief economist, Lawrence Yun, notes that “after a dismal winter, more buyers got an opportunity to look at homes last month and are beginning to make contract offers. Sales activity is expected to steadily pick up as more inventory reaches the market, and from ongoing job creation in the economy.”
The Realtors also predict that U.S. existing home sales will total just over 4.9 million this year, down from about 5.1 million in 2013. But with ongoing inventory shortages in much of the country, the national median existing home price is expected to grow between 6 percent and 7 percent in 2014.
Home prices still have upward momentum
In another indication of rising home prices, albeit slower than before, Black Knight Financial Services (formerly LPS) released its latest Home Price Index report on Monday, which is based on February 2014 residential real estate transactions. The index was up 0.7 percent for the month. Since last year, the index has increased 7.6 percent, not as much as in recent months.
Black Knight also released data for the 20 largest states, and 40 MSAs, on Monday. Prices in the largest MSAs were up, with Chicago, Dallas and Los Angeles all recording an increase of 0.9 percent for the month. Washington, D.C., was up 0.7 percent and New York gained 0.7 percent.
Other places did even better: metro San Jose, Calif., was up 2.6 percent for the month, and San Francisco was up 2.2 percent. The biggest loser for the month, Cincinnati, didn’t lose much: prices were down 0.2 percent. Places like Atlantic City, N.J.; Dayton, Ohio; and Birmingham, Ala., all were down 0.1 percent.
The Black Knight index combines the company’s property and loan-level databases to produce an analysis of home prices for each of more than 18,500 U.S. Zip codes. The index represents the price of non-distressed sales by taking into account price discounts for REO and short sales.
Wall Street had a mixed day on Monday. The Dow Jones Industrial Average gained 87.28 points, or 0.53 percent, and the S&P 500 advanced 0.32 percent. The tech-heavy Nasdaq, however, was down by a scant 0.03 percent.