National Association of Realtors, (NAR) Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed in July, rose 5.2 percent to 79.4 from a downwardly revised 75.5 in June, but remains 19.1 percent lower than July 2009, when it was 98.1. The data reflect contracts and not closings, which usually lag one or two months. In the West, which includes California, the index increased 11.6 percent to 95, 17.6 percent lower compared with a year ago.
“Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” said Lawrence Yun, NAR chief economist. “Affordability could reach a generational high in the second half of this year because of rock-bottom mortgage interest rates, helped partly by the Fed’s very accommodative monetary policy. The loan underwriting standards are tighter, but home buyers can improve their chances of getting a loan by staying well within their budget.”