Home contract signings rose for the 13th straight month, according to the National Association of Realtors, which reported pending home sales rising 13.3% over May 2011 and up nearly 6% over April 2012.
“The housing market is clearly superior this year compared with the past four years,” said Lawrence Yun, NAR chief economist. “Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10% improvement in total sales for 2012.”
The news from NAR joins a larger discussion on the impact of positive housing news for the spring selling season.
On a seasonally adjusted basis, the Standard & Poor’s Case-Shiller 20-city index increased by 0.7% in both March and April. The CoreLogic ($18.31 0.28%) national house price index rose by 1.1% and 1.2% in March and April, respectively. Additionally, Zillow ($38.63 2.73%) home value index posted a 0.5% increase in May.
Housing analysts at Goldman Sachs ($95.86 2.37%) said there are some suspicions as to whether all of this good housing news may be misleading. After all, they point there are 2 million vacant housing units, with another 4 million in shadow inventory.
“These two seemingly contradictory aspects of the housing market lead many to ask: Can house prices increase in the presence of excess housing supply?” they ask.
Yun commented that desirable housing inventory is actually low, indicating a push on prices. This low inventory, he said, could actually hold back some contract activity. “If credit conditions returned to normal and if we had more inventory, especially in the lower price ranges, more people would become successful buyers. In an environment of historically favorable housing affordability conditions, it’s frustrating to see some consumers thwarted in the process,” Yun said.