Pending Home Sales Jump 6.1 Percent in May

• June 30, 2014

by Lark Turner

A DC home that went under contract in May.

Pending home sales rose 6.1 percent in May thanks to lower mortgage rates and increased inventory, the National Association of Realtors announced on Monday. It was the largest month-over-month gain since April 2010.

While pending sales rose between April and May, the sales volume still fell 5.2 percent below 2013 levels. That’s thanks in part to issues facing first-time homebuyers, who are struggling to qualify for mortgages due to debt burdens and poor credit, according to NAR economist, Lawrence Yun. The market probably won’t recover enough in the second half of the year to make up for the poor start and outpace 2013, Yun said in a statement.

“The flourishing stock market the last few years has propelled sales in the higher price brackets, while sales for homes under $250,000 are 10 percent behind last year’s pace. Meanwhile, apartment rents are expected to rise 8 percent cumulatively over the next two years because of tight availability. Solid income growth and a slight easing in underwriting standards are needed to encourage first-time buyer participation, especially as renting becomes less affordable.”

Pending home sales jumped the most in the northeast, which nearly recovered to last year’s sales figure. The West was worst off, with pending sales that also rose sharply but were 11.1 percent below last year’s.

This article originally published at http://dc.urbanturf.com/articles/blog/pending_home_sales_jump_6.1_percent_in_may_but_are_still_down_year-over-yea/8678