Pending home sales pick up despite limited inventory
Pending home sales are picking up and remain at their highest level, according to the National Association of Realtors庐 (NAR).
Lawrence Yun, NAR chief economist, said more buyers than usual entered this year蘑菇视频 competitive spring market compared with the last two years.
鈥淒emand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year,鈥� Yun said.
Scott Detweiler, president of the Fayette Board of REALTORS庐 said real estate transactions are on the rise in Fayette County.
鈥淲e鈥檙e had quite a few closings and pending (home) sales over the last few weeks,鈥� Detweiler said.
While the county is usually delayed in catching up with state and national real estate trends, Detweiler said this time is an exception.
鈥淒emand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer,鈥� Yun said.
Despite solid gains last month from pending sales driven by a steadily-improving labor market in addition to mortgage rates hovering around four percent, and the likelihood of more renters looking to hedge against increasing rents, Yun said there continues to be a depressed level of homes available for sale, especially for first-time home buyers.
Detweiler further added that April to August is prime time in the real estate market, but the number of available properties for sale or rent in Fayette County right now is slim.
Tom Simon, real estate broker and owner of Howard Hanna Real Estate Services in Belle Vernon, agreed the housing market appears solid right now with the economy recovering, but inventory is limited.
Dr. Elliot Eisenberg, a former senior economist with the National Association of Home Builders, also said the Pennsylvania housing market is improving, but growth is below the national average.
He noted the Pittsburgh market appears to have not been affected by the boom, but has seen a steady increase over the last several years while other Pennsylvania markets saw a decrease.
鈥淲e鈥檝e seen credit is getting easier to obtain and the Federal Housing Administration (FHA) lowering the annual mortgage insurance premiums on home loans has also made things easier for home buyers,鈥� he added.
On the other hand, Elliott said that student loan debt and low income growth have made it difficult for young people to enter the housing market.
A higher median price gap between new and existing homes, increased rental prices and larger homes being built by contractors not meeting the demand are also impeding factors.
While federal mortgage rates remain low, Simon said he believes that projected increases won鈥檛 dampen the market, but actually help it because people tend to buy when the rates start to go up.
鈥淢ore people will get off the fence and buy and that will bring the inventory needed right now into the market,鈥� said Simon.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, reportedly climbed by 11 percent over last year and has continued to increase consecutively in reaching its highest level.
The index is a leading indicator for the housing sector, NAR said, based on pending sales of existing homes.
A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
With contract activity up compared to a year ago, Yun said the increased number of traditional buyers who appear to be replacing investors paying in cash is good news. 鈥淚t indicates this year蘑菇视频 activity is being driven by more long-term homeowners,鈥� he added.
Although Yun expects to see a gradual improvement in home sales in the months ahead, he said that insufficient supply and accelerating prices could be a drawback to sales reaching their full potential.
鈥淭his in turn has pushed home prices to unhealthy levels,鈥� Yun said. 鈥淪imply put, housing inventory for new and existing homes needs to improve measurably to improve affordability.鈥�