Washington - Pending home sales rose 5.9% to an index reading of 101.1 in May after an unrevised 5.5% decrease to 95.5 in April, according to a report released Wednesday by the National Association of Realtors.
The gain far outstripped expectations, as economists polled by Thomson Reuters had predicted that the index would rise only 1%.
Year-over-year, the pending homes sales index is up 13.3% from last May, when the index was 89.2.
Regionally, pending sales were up across the board. The West saw a 14.5% increase to 108.7, while the index rose 6.3% in the Midwest to 98.9. In the South, a 1.1% gain boosted the index to 106.9. The Northeast experienced a 4.8% advance to an index reading of 82.9
NAR Chief Economist Lawrence Yun said a long-term comparison shows the current housing market to be “clearly superior” to any time during the past four years.
“The latest increase in home contract signings marks 13 consecutive months of year-over-year gains,” he said. “Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10 percent improvement in total sales for 2012.”
Yun said a low inventory of homes in the lower price ranges could be preventing some contract signings.
“If credit conditions returned to normal and if we had more inventory, especially in the lower price ranges, more people would become successful buyers. In an environment of historically favorable housing affordability conditions, it’s frustrating to see some consumers thwarted in the process,” Yun said.