Numbers Count: Pending home sales heat up
Numbers count. They matter to bankers and to prospective homebuyers, sellers, and real estate professionals. Here’s my take on the key numbers on the housing market this week.The numbers: Nine-year peak in pending home sales
Pending home sales are at a nine-year high. The Pending Home Sales Index rose 0.9% in May to 112.6 — the highest level since April 2006, according to the National Association of REALTORS Pending Home Sales Index, released June 30. Pending home sales were up from a year ago in all regions of the country: 13% in the West, 10.6% in the Northeast and South, and 7.8% in the Midwest. Increases in May over April — 2.2% in the West and 6.3% in Northeast — offset declines in the South of 2.2% and in the Midwest of 0.6%.What counts: Home sales are hot in many markets. It’s not uncommon when rates begin to rise for many undecided potential buyers to begin to move into the market. And lately, rates have definitely been creeping higher.
I’ve been encouraging friends and acquaintances on the fence about buying a home that this may be a good time to get off that fence. Rates are still below where they were a year ago, but there are indications they may rise further. The Federal Reserve has indicated it may raise rates later this year, which will likely push rates on mortgages higher.
If you’re nervous about rising rates, you may find it useful to play around with an online calculator, such as this calculator available on Bankofthewest.com. This tool can give you some idea of what you may be able to afford and how it may change with changing interest rates. When you get closer to making an offer on a home, you’ll want to consider getting preapproved for a mortgage so that any offer you make is supported by evidence that you have a bank prepared to lend you what you need for the home.