Washington, DC, United States (4E) – The number of contracts to buy existing U.S. homes climbed in May by the most in over four years, further evidence that the residential-real estate market is bouncing back after a slow start in the first few months of the year, according to a survey released in Washington on Monday.
The pending home sales index by the National Association of Realtors climbed 6.1 percent, the largest increase since April 2010, after April’s revised figure of 0.5 percent gain. The advance surpassed the median forecast by economists surveyed by Bloomberg News for a 1.5 percent rise.
Demand for homes is driven by lower mortgage interest rates, easier access to credit for some households and better outlook on employment. Meanwhile, rising prices and limited rise in income are keeping the benefit from residential property market from being more broad-based.
The increase in May was the biggest since the expiration of a tax credit four years ago that prompted first-time buyers to rush into signing contracts. Estimates by 37 economists in a Bloomberg survey ranged from a 0.5 percent drop to a 4 percent gain after a previously reported 0.4 percent increase in April.