Pending home sales climbed up, perhaps because sidelined buyers are jumping into the market before interest rates rise further, the chief economist of the National Association of Realtors said.
Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for May showing that pending home sales improved notably with the seasonally adjusted national index climbing 6.7% from April and increasing 12.1% above the level seen in May 2012.
Meanwhile, the NARs chief economist Lawrence Yun is suggests the spike in contract activity is likely the result of sidelined buyers now jumping to buy before interest rates, increasing for several weeks now, rise further:
"Even with limited choices, it appears some of the rise in contract signings could be from buyers wanting to take advantage of current affordability conditions before mortgage interest rates move higher, ... This implies a continuation of double-digit price increases from a year earlier, with a strong push from pent-up demand."