- Lawrence Yun, NAR chief economist
Contracts to buy previously owned US homes jumped to the highest level in more than nine years in May, adding to signs the US housing market is gaining steam after a wobbly start to the year. According to the National Association of Realtors, the index of pending home sales rose 0.9% to a seasonally adjusted 112.6, the highest since April 2006. The April gauge was revised down to 111.6 from 112.4. Pending home sales surged 10.4% from a the previous year. The housing market recovery is back on track after being derailed by harsh weather at the beginning of the year. It is being supported by a tightening labour market, which is helping to underpin some pick-up in wage growth.
Last week NAR reported a sharp increase in existing home sales following a decline in April. First-time home buyers also began making their way back to the real-estate market in May. Sales of existing homes surged 5.1% in May to a seasonally adjusted rate of 5.35 million, the highest level since November 2009. However, existing home sales, which make up around 90% of the market, are still well below their prerecession peak, when they exceeded 6 million and even topped 7 million for part of 2005. Prices have also been climbing lately. The median price of an existing home in May was $228,700, or 7.9% higher than in May 2014.
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