WASHINGTON: US pending home sales surged in July to their best level in two years, in fresh evidence of sustained strength in the long-depressed sector, the National Association of Realtors said on Wednesday.
The NAR's monthly pending home sales index (PHSI) reached 101.7 in July, up from 99.3 in June and 12.4 percent higher than a year earlier.
The rise was a sign of the release of pent-up demand and ultra-low mortgage loan rates, analysts said.
"While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity," said NAR economist Lawrence Yun.
NAR said sales are now being constrained by the tighter inventory of homes on the market, a reverse from the glut of the past five years.
That could relate to the slowdown in banks foreclosing on defaulted home loans and putting the properties on the market.
"The relationship between the PHSI, which is based on initial contracts, and the existing-home sales series, which reflects finalised contracts, appears to have loosened a bit in recent months, but today's data suggest that the trend in sales remains upward," said Jim O'Sullivan of High Frequency Economics.
On Tuesday the S&P/Case-Shiller home price index for 20 cities showed the first year-on-year rise since 2010 in its June reading.
David Blitzer, index chairman for S&P Dow Jones Indices, said the market is showing "exactly what we needed for a sustained recovery; monthly increases coupled with improving annual rates of change."
"The market may have finally turned around," he said.
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