Pending Home Sales Preview: Homeowners In The 'Driver's Seat'

The National Association of Realtors (NAR) is set to release the Pending Home Sales Index for May at 10:00 a.m. ET, with expectations for a gain of 0.60 percent. Consensus estimates range from 0.0 to 3.0 percent according to Bloomberg. In April, pending home sales rose for the fourth straight month and reached their highest level in since May 2006. This follows on the back of solid gains in existing and new home sales. The Pending Home Sales Index (PHS), a leading indicator of housing activity, measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos and co-ops. Because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing Home Sales by a month or two. Lawrence Yun, NAR chief economist, says the steady gains each month this year highlight the fact that buyer demand is strong. "Realtors are saying foot traffic remains elevated this spring despite limited — and in some cases severe — inventory shortages in many metro areas," he said. "Homeowners looking to sell this spring appear to be in the driver's seat, as there are more buyers competing for a limited number of homes available for sale." Adds Yun, "As a result, home prices are up and accelerating in many markets." Shares of the