According to a statement today by the National Association of Realtors, pending home sales rose in July to the highest level in over two years and remain well above year-ago levels.

Pending home sales, which refer to contract signings but not closings, are used as a forward-looking indicator to create a Pending Home Sales Index. The index rose 2.4 percent to 101.7 in July from 99.3 in June and is 12.4 percent above July 2011 when it was 90.5.

Lawrence Yun, NAR chief economist, noted that “while the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity.” The index is at the highest level since April 2010, which was shortly before the closing deadline for the home buyer tax credit.

According to the NAR statement, the PHSI gains were highest in the South, rising 5.2 percent to an index of 111.7 in July, which is 15.6 percent above a year ago. By comparison, the Northeast increased 0.5 percent to 77.0 in July (13.4 percent higher than a year ago), the Midwest index grew 3.4 percent to 97.4 in July (20.2 percent above July 2011), and in the West the index slipped 1.7 percent in July to 109.9 but is 1.3 percent higher than July 2011.

Today’s NAR statement also mentioned that existing-home sales are projected to rise 8 to 9 percent in 2012, followed by another 7 to 8 percent gain in 2013. Home prices are expected to increase 10 percent cumulatively over the next two years.

“Falling visible and shadow inventories point toward continuing price gains. Expected gains in housing starts of 25 to 30 percent this year, and nearly 50 percent in 2013, are insufficient to meet the growing housing demand,” Yun said.

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