NAR: Pending Home Sales Index Gains 0.5% to 110.9 in July

Pending home sales increased 0.5% to an index reading of 110.9 in July, after a revised 1.7% decrease to 110.4 in June, according to a report released Thursday by the National Association of Realtors.

The June decrease was first reported as 1.8% to 110.3.

Economists polled by Thomson Reuters predicted the index would be up 1.0%

An index of 100 is equal to the average level of contract activity during 2001.

Year-over-year the pending homes sales index increased 7.4% from last July, when the index was 103.3.

Regionally, pending sales were mixed. The Northeast saw a 4.0% gain to 98.8, while sales fell 1.4% in the West to 103.0. In the South, sales grew 0.6% to 124.2, and sales were flat at 107.8 in the Midwest.

"Led by a solid gain in the Northeast, contract activity in most of the country held steady last month, which bodes well for existing-sales to maintain their recent elevated pace to close out the summer," NAR Chief Economist Lawrence Yun said. "While demand and sales continue to be stronger than earlier this year, Realtors have reported since the spring that available listings in affordable price ranges remain elusive for some buyers trying to reach the market and are likely holding back sales from being more robust."

"In light of the recent volatility in the stock market, it's possible some prospective buyers may err on the side of caution and delay decisions, while others may view real estate as a more stable asset in the current environment," Yun said. "In light of the recent volatility in the stock market, it's possible some prospective buyers may err on the side of caution and delay decisions, while others may view real estate as a more stable asset in the current environment."

Equity market volatility, even with a possible Fed tightening, Yun said, "could stabilize long-term mortgage rates and preserve affordability for buyers."

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