Americans signed contracts to buy homes in April at the fastest pace in nearly nine years, evidence that steady job growth is strengthening the real estate market.
The National Association of Realtors said Thursday that its seasonally adjusted pending home sales index climbed 3.4% to 112.4 last month. It’s the fourth consecutive monthly gain. The index now stands at its highest level since May 2006.
The upswing comes after a year of strong hiring, which has heightened demand to buy houses. Increased sales should help bolster the economy, but the surge could potentially destabilize the housing market. Inventories remain low, and rising home values are eclipsing wage growth.
Signed contracts are a barometer of future purchases. A one- to two-month lag usually exists between a contract and a completed sale.
Pending sales increased in the Northeast, Midwest and South, while barely edging upward in the West. Greater demand has fueled sales growth this year after a lacklustre 2014. Still, there is evidence that limited inventories are beginning to weigh on the market.