Pending sales of us homes at highest level since 2010

Pending sales of US homes are at their highest level since 2010, according to the National Association of Realtors. The NAR's Pending Home Sales Index rose by 2.4 per cent in July, leaving contract signings 12.4 per cent above July 2011.

Lawrence Yun , NAR chief economist, said the index is at the highest level since April 2010, which was shortly before the closing deadline for the home buyer tax credit. "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," Yun said.

Limited inventory is constraining market activity. "All regions saw monthly increases in home-buying activity except for the West, which is now experiencing an acute inventory shortage," Yun added.

Existing-home sales are now projected to rise 8 to 9 percent in 2012, as the US property recovery continues. This will then be followed by another 7 to 8 percent jump in 2013, the NAR adds. Prices are also predicted to increase by 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.