Contracts for pending sales of existing homes rose to its highest level in nine years, according to a new report.
The National Association of Realtors (NAR) said that their pending home sales index, which is based on contracts signed in May, increased by 0.9 percent to 112.6, the index's highest level since April of 2006 and a 10.4 percent increase from the same month in 2014. May's results also continued a recent string of increases, as the index rose for its fifth straight month.
Pending home sales typically become finalized in one to two months, according to the NAR.
"The recent trend suggests that we will see continued strength in re-sales in the months ahead. However, the current low inventory levels, which are placing upward pressure on home prices, remain a downside risk," Derek Lindsey, an analyst at BNP Paribas in New York, told The New York Times.
As Lindsey indicated, housing starts have been low, but new data from the Commerce Department is hopeful.
In a report from Bloomberg Business, builders are responding to housing demand. Though housing starts were down in May, decreasing 11.1 percent to a 1.04 million annualized rate, April's pace was revised upward to 1.17 million. Despite the May decline, the results for that month and June were the best two-month stretch since 2007 and permits for future housing starts rose to the highest level since that same year.
Two of the country's four regions showed increases in May. The Northeast showed the highest gain, up 6.3 percent. Contracts in the West also grew, up by 2.2 percent. Though the South and the Midwest were down, each only fell by under 1 percent, down 0.8 percent and 0.6 percent, respectively.
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