A report from the Northeast Tennessee Association of Realtors shows 895 new contracts in July, nine more than in June. Total active pending sales, which include contracts from previous months that have not closed, rose to 1,450. That is 200 more than in June.
Compared to last year, new contracts were 11.6% higher than July last year, a 28-month high. The active pending sales index was 20% higher than last year.
Pending sales are a leading indicator of housing activity based on signed contracts for existing single-family homes, condominium, and townhome resales. Since resales go under contract a month or two before the deal is closed, the index typically leads existing home sales by about two months.
According to NETAR, up to 5% of pending contracts fall through under normal market conditions. In today’s market, the fall-through rate has been higher because of contingencies, like home inspections, financing and acceptable appraisals, written into sales contracts.
Year-to-date, new home listing on the market are 7.9% higher than at this point in the year last year and new pending sales are 17.9% higher.
Available homes on the market are still sparse, with 3.5 months of inventory, the number of months it would take to sell all listed homes at current sales rates.