The National Association of Realtors reported yesterday that the Pending Home Sales Index showed a 5.2% increase in Pending home sales from last month. This was an unexpected jump, some analysts were expecting another monthly drop in home sales.
Despite the good news, National Association of Realtors chief economist Lawrence Yun cautioned that the recovery ahead will be a long process.
“Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” Yun said. “But the recovery looks to be a long process. Homebuyers over the past year got a great deal [but] for those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”
Yun added, “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.”