While the National Association of Realtors Pending Home Sales Index rose 5.2 percent from June (75.5) to July (79.4). On a year-over-year basis, however, the index is now down 19.1 percent versus 18.6 percent in June and 15.9 percent in May.
∙ Pending Home Sales Rise [realtor.org]
∙ U.S. Pending Home Sales Down 18.6 Percent Year-Over-Year In June [SocketSite]
∙ Pending Home Sales Plummet And The Markets React [SocketSite]
This data suggests that August and September closings will be larger in number than July and August closings.
We’ve hit 2 peaks on this index in the last year, in October ’09 (112.4) because of expiration of the prior tax credit and in April ’10 (110.9) because of the expiration of the more recent tax credit.
Around June is when the PHSI usually peaks, so it’s actually notable that July ’10 is higher than June ’10, even though it’s well below ’09 numbers:
http://trendingrealestate.typepad.com/trendingrealestate/2008/09/a-historical-review-of-nar-pending-home-sales.html
What’s also interesting is that March through June PHSI in ’05, ’06, and ’07 was above April’s peak.
So much for the “tax credits are the only reason for any volume increase” spin
Really? I would think that March being at 104.6 and April being at 110.9, while the usual peak of June is more than almost 28% lower than March and almost 32% lower than April would suggest that the tax credits produced a lot of volume. Houses needed to be pending by April to qualify.
But I would think a combination of foreclosures being allowed again, for the most part, and interest rates being lower than ever would produce some volume too, however minimal.
It’s also worth noting that a tax credit for housing (like Cash for Clunkers) tends to pull demand forward, so the June pending number is more likely to be affected by the tax credit than the July pending number. We’ve already seen that July existing SFR sales crashed to the lowest since 1995 (close to the 1996 trough) — we can really only go up from there one would think:
https://socketsite.com/archives/2010/08/existing_us_home_sales_pace_plunges_272_in_july_255_yoy.html