JUNE PENDING HOME SALES INDEX UP 5.3% TO 89
The June Pending Home Sales Index was up 5.3% to 89 from a downwardly revised May reading of 84.5. On a y-o-y basis, the Index is down 12.3%, an improvement over last month’s -15.4% y-o-y reading.
NAR Chief Economist Yun believes the “vacilllation of data from one month to the next indicates a housing market in transistion” and notes that all 4 regions made gains in June. Yun believes the temporary tax credit for first-time buyers — he numbers them 2.5mln — will push Existing Home Sales up 7% in 2009 to 5.51mln from an expected 5.15mln this year. Existing Home Sales are currently running under 5mln per month since February, so NAR is expecting a substantial jump in sales.
NAR notes that rising commodities prices and higher construction costs have made existing homes a more attractive alternative. NAR expects home prices to rise 3 to 6% in 2009. That said, they expect New Home Sales to bottom out in Q2 2009 and urge builders to cut production further to cut down on inventories.