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Eye on the Economy: Home Sales Surge after Slow First Quarter
David Crowe / Eye on Housing / July 10, 2014
Housing news continued to improve as pending home sales surged following a slow first quarter. Home prices also continued to move higher but at a more moderate pace, suggesting the extra push caused by investors may be slowing. Economic news, however, was mixed. Consumer confidence increased in response to improving labor market conditions. On the other hand, new estimates from the first quarter revealed a steeper decline in real GDP. Early indications are that real GDP will reverse course from a dismal first quarter and gains in housing will continue the pace set before the end of 2013.
Pending homes sales posted the biggest month-over-month increase in four years. The Pending Home Sales Index (PHSI) increased 6.1% in May. The increase in pending home sales follows a healthy increase in existing home sales and a Census report showing a surge in new home sales. In May, new single-family home sales increased 18.6% from the prior month.