More Americans than forecast signed contracts to purchase previously owned U.S. homes in April, indicating a pickup in the housing market during the busy spring selling period.
The index of pending home resales climbed 3.4 percent to the highest level in nine years after a revised 1.2 percent gain the prior month, the National Association of Realtors said Thursday in Washington. The median forecast of 39 economists surveyed by Bloomberg called for an increase of 0.9 percent.
Steady hiring, easier credit availability and borrowing costs still close to historically low levels are providing a boost to the market. The report follows data on new-home sales and housing starts that show a pickup in residential real estate will contribute to economic growth.
“Realtors are saying foot traffic remains elevated this spring despite limited -- and in some cases severe -- inventory shortages in many metro areas,” NAR chief economist Lawrence Yun said in a statement. “Homeowners looking to sell this spring appear to be in the driver’s seat.”
Estimates in the Bloomberg survey ranged from a drop of 3.7 percent to a rise of 3 percent. The Realtors’ group revised the March data from a previously reported gain of 1.1 percent.
All four regions saw an increase, the report showed. Sales advanced 10.1 percent in the Northeast, 5 percent in the Midwest, 2.3 percent in the South and 0.1 percent in the West.
Compared with a year earlier, the index increased 13.4 percent on an unadjusted basis, after a 13.5 percent gain in the prior 12-month period. They were projected to climb 10.9 percent, according to the Bloomberg survey median.
The pending sales gauge was 112.4 on a seasonally adjusted basis, the highest since May 2006, the Realtors group said. A reading of 100 corresponds to the average level of contract activity in 2001, or “historically healthy” home-buying traffic, according to the NAR.
Economists consider pending sales a leading indicator because they track contract signings. Purchases of existing homes are tabulated when a deal closes, typically a month or two later.
Those resales, which make up more than 90 percent of the housing market, dropped 3.3 percent to a 5.04 million annualized rate in April after a 5.21 million pace that was the strongest in almost two years, the Realtors group reported on May 21. The median price from a year earlier posted the biggest 12-month gain since January 2014 as the number of houses for sales fell from the same time last year.
A Commerce Department report showed new home sales jumped 6.8 percent last month to a 517,000 annualized pace, more than projected.
Housing-related businesses including PulteGroup Inc. and Home Depot Inc. have said the spring selling season is off to a good start. At Toll Brothers Inc., the largest U.S. luxury-home builder, lower tax provisions made up for a decline in revenue in the quarter ended April 30, helping to increase earnings.
“The housing market is on firm footing and heading in the right direction,” Chairman Robert Toll said in a May 27 statement. “As pent-up demand is released, we envision a gradual and elongated recovery for housing.”