Pending home sales hit highest level since late 2006

Federal Reserve Chairman Ben Bernanke suggested last week that the central bank could slow its monetary stimulus later this year, which could allow mortgage rates to rise. 

Still, rates remain near historic lows and would probably increase slowly under a pullback of quantitative easing, which Bernanke said could end within the next year. 

Contract activity nearly matched December 2006 levels when it reached 112.8. 

Sales are 12.1 percent above May 2012 levels.

The data reflect contracts but not closings.

As further evidence of the improving housing market, pending sales have been above year-ago levels for the past 25 months.

Yun also upgraded the price forecast for the year, with the national median existing home price expected to rise more than 10 percent to nearly $195,000, which would be the strongest increase since 2005 when the median increased 12.4 percent.

Meanwhile, existing home sales are projected to increase 8.5 to 9 percent, reaching about 5.07 million this year, the highest in seven years. 

Regionally, contract signing picked up in three of the four areas. 

In the Northeast the index was unchanged at 92.3 but is 14.3 percent above a year ago.  

The Midwest’s index jumped 10.2 percent to 115.5 in May and is 22.2 percent higher than a year ago.  

Pending sales in the South rose 2.8 percent and are 12.3 percent above a year ago.  

The West’s index jumped 16 percent in May to 109.7, but the region’s struggles with inventory continue so sales were only up 1.1 percent above last year’s levels.