The Pending Home Sales Index – a forecast indicator based on contract signings – increased 3.4 per cent in April to 112.4. That month marked the highest level since May 2006 (112.5) and represents the eight consecutive month of year-over-year growth.
This data aligns with Fannie Mae’s recent housing forecast.
“We … are seeing positive developments in the housing space, supporting our forecast of moderate but broad-based improvement in 2015 compared to last year,” said Doug Duncan, chief economist at Fannie Mae. “Purchase mortgage applications have moved up consistently for a couple of months, and while refinance applications have recently pulled back, the actual volume of both purchase and refinance originations earlier in the year came in stronger than we had projected.”
Fannie Mae is predicting originations to hit $1.46 trillion in 2015.
Originators can expect the trend to continue as the warm weather and low rates draw buyers to the market during the summer months.
"The housing market can handle interest rates well above 4 percent as long as inventory improves to slow price growth and underwriting standards ease to normal levels so that qualified buyers — especially first-time buyers — are able to obtain a mortgage," Lawrence Yun, NAR chief economist said in an official release.
By Justin da Rosa
According to the National Association of Realtors, pending home sales rose in April for the fourth straight month and reached a nine-year record high – indicating the housing market is returning to levels not seen since pre-recession.