WASHINGTON (7/2/13)--Pending home sales for May rose to the highest level since late 2006, increasing 6.7% to 112.3 from a downwardly revised 105.2 in April, said the National Association of Realtors Friday.
The Pending Home Sales Index is 12.1% greater than May 2012's 100.2 reading. The index data are based on contract signings, not closings. The pace of the activity was the strongest since December 2006, when it reached 112.8, said NAR.
The contracts come as mortgage interest rates began to rise. "Even with limited choices, it appears some of the rise in contract signings could be from buyers wanting to take advantage of current affordability conditions before mortgage interest rates move higher," said Lawrence Yun, NAR chief economist.
"This implies a continuation of double-digit price increases from a year earlier, with a strong push from pent-up demand," he added.
The national median existing-home price is expected to go up more than 10% to nearly $195,000 in 2013--the strongest increase since a 12.4% hike in 2005, Yun said. NAR projected that existing-home sales would increase 8.5% to 9% and reach about 5.07 million in 2013, the highest level in seven years.