Although there were monthly and yearly reductions in June, the index was still in positive territory.
Chicago, IL (PRWEB) August 01, 2014
The Federal Savings Bank was disappointed by a recent announcement on July 28 from the National Association of Realtors, showing that pending home sales, which are based on contract signings, fell in June.
The Pending Home Sales Index declined from 103.8 in May to 102.7 in June, a 1.1 percent decrease. Compared to June 2013's index of 110.8, there was a 7.3 percent drop. Although there were monthly and yearly reductions in June, the index was still in positive territory, as a reading of 100 indicates an average level of contract activity. This was the second consecutive month that the PHSI outpaced the average after falling for several months following November 2013, when the index was at 100.7.
"Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved," said Lawrence Yun, NAR chief economist.
He went on to say there are still inventory problems in some parts of the country, strict lending standards are keeping potential buyers from low interest rates and wages are stagnant.The Federal Savings Bank believes an increase in housing demand is dependent on income improvements. The lender encourages home buyers to get approved now for a home loan to hedge the possibility of prices going up further. The lack of inventory is the major factor in pushing up home prices. In the short term, U.S. equities may sell off further causing slump in home sale and price, but over the long run higher mortgage rates, and home prices are to follow.
For information about getting a low cost mortgage to aid in stimulating the pace of home sales, contact the Federal Savings Bank, a veteran owned bank.