NAR: Home sales may increase over next few months

Improvement expected for second part of year

The National Association of Realtors® says the next few months could bring a modest gain in home sales. The group also says that an improvement is forecast for the second part of the year, as more consumers are able to tap into affordable mortgages.

NAR reports that the Pending Home Sales Index, based on contracts signed in April, increased 6.3 percent to 88.2 percent, compared to 83 in March.

Pending sales contracts are increasing in places where prices are dropping significantly, said Lawrence Yun, chief economist at NAR.

"Bargain hunters have entered the market en masse, especially in areas that have experienced double-digit price declines, but it’s unclear if they are investors or owner-occupants," Yun said. "Sharp price reductions are leading to a quicker discovery of price equilibrium points. The West is already seeing year-over-year gains in pending contracts."

Yun said mortgage interest rates will increase steadily, but still remain historically favorable, NAR reports. Mortgage company Freddie Mac said that 30-year fixed-rate mortgages this week averaged 6.32 percent, the Associated Press reports.

Find the full NAR article here.

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