U.S. Pending Home Sales Climb To Nine-Year High In May

(RTTNews) - After reporting a sharp jump in U.S. pending home sales in the previous month, the National Association of Realtors released a report on Monday showing that pending home sales saw further upside in May.

NAR said its pending home sales index climbed 0.9 percent to 112.6 in May from a slight downward revision of 111.6 in April. Economists had expected the index to rise by 0.6 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

With the bigger than expected increase, the pending home sales index reached its highest level since hitting 113.7 in April of 2006.

Lawrence Yun, NAR chief economist, said, "The steady pace of solid job creation seen now for over a year has given the housing market a boost this spring."

"It's very encouraging to now see a broad based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive," he added.

The bigger than expected increase by the pending home sales was partly due to strength in the Northeast, where pending sales surged up by 6.3 percent.

Pending home sales in the West also jumped 2.2 percent, while pending home sales in the Midwest and South fell by 0.6 percent and 0.8 percent, respectively.

Last Monday, NAR released a separate report showing that existing home sales increased by more than expected in May, with sales jumping to their highest level in nearly six years.

The report said existing home sales surged up by 5.1 percent to an annual rate of 5.35 million in May from an upwardly revised 5.09 million in April.

Economists had expected existing home sales to climb to an annual rate of 5.25 million from the 5.04 million originally reported for the previous month.

With the bigger than expected increase, existing home sales rose to their highest level since reaching 5.44 million in November of 2009.