Contract signings to buy a home rose for the fifth straight month in May to the highest level in more than nine years, a signal that the housing market’s recovery is strengthening.
Pending home sales climbed 0.9 percent to 112.6 last month, the best pace since April 2006, which was ahead of the housing crisis, the National Association of Realtors (NAR) said Monday.
April’s level of 111.6 was slightly lower than first reported but is 10.4 percent above May 2014, putting sales on their best start since the downturn in 2007.
Low mortgage rates and job growth have helped get buyers back into the market.
“The steady pace of solid job creation seen now for over a year has given the housing market a boost this spring,” said Lawrence Yun, the NAR’s chief economist.
But a continued lack of available homes for sale is pushing up prices at a rapid rate.
Yun said that the lack of inventory is causing home prices to rise at “an unhealthy and unsustainable pace.”
“Housing affordability remains a pressing issue with home-price growth increasing around four-times the pace of wages,” Yun said.
“Without meaningful gains in new and existing supply, there’s no question the goal post will move further away for many renters wanting to become homeowners,” he said.
Gains in the Northeast and West were offset by small decreases in the Midwest and South.
Regionally, the index in the Northeast increased 6.3 percent and was up 2.2 percent in the West.
The Midwest saw a 0.6 percent decline while sales in the South decreased 0.8 percent.