Consumers were motivated by low mortgage interest rates to return to the housing market and lock in contracts for homes. The NAR’s Pending Home Sales Index for June jumped 2.8% to 108.3 after 105.4 in May. The index was 1.6% above June 2018. The reading was the highest since December 2017. Conversely, in June the Freddie Mac 30-year fixed rate for a mortgage was 3.80%, its lowest since 3.95% in December 2017. With the July rate at around 3.77%, it should help keep buyers in the market in the coming month’s data. Sales of existing homes should be strong in July, and pending home sales should remain elevated.
Pending home sales were up in three of four regions month-over-month. The Northeast (+2.7%), Midwest (+3.3%), and South (+1.3%) all had good gains. The West (-1.3%) may have exhausted some pent-up demand in recent months. Altogether, pending home sales were up year-over-year.
The housing market is one of the bright spots of the economy for the second quarter and could have some upward momentum to impart into the third quarter.
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