According to data from the National Association of Realtors, the number of pending home sales showed an increase of 5.2 percent compared to last month. While the number was still 19.1 percent below figures from July of last year, economists were more optimistic and said that the increase was due to the affordability of homes for those considering relocation.
"Affordability could reach a generational high in the second half of this year because of rock-bottom mortgage interest rates, helped partly by the Fed's very accommodative monetary policy. The loan underwriting standards are tighter, but homebuyers can improve their chances of getting a loan by staying well within their budget," said Lawrence Yun, the NAR's chief economist.
The pending home sales index shows the number of homes which have signed contracts, and generally predicts sales one or two months in advance.
The significant increase came as a surprise to many analysts, which had predicted that pending sales would continue to decline due to the expiration of the first-time homebuyer tax credit. The average prediction from Bloomberg analysts was that pending sales would have decreased by 1 percent.
More News