July sees home sales jump

State’s increase tops 10% for second-straight month

Home sales in Arkansas jumped 10.8 percent in July compared with July last year, the Arkansas Realtors Association said Thursday.

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A listing of residential units sold in July by housing markets in Arkansas with comparisons between 2013 and 2014.

It was the second-straight month for more than a 10 percent increase in sales. Home sales were up about 10.4 percent in June, the association said last week in a delayed report.

"Double-digit growth two months in a row is pretty compelling evidence that the housing market is doing well this summer," said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.

There were 2,875 homes sold in Arkansas last month compared with 2,594 sold in July last year.

Last month's sales exceeded last year's best month -- August, when 2,818 homes were sold, Pakko said.

"And you have to go back to 2007 to find any month that had a higher number of sales than July 2014," Pakko said.

The reasons for the continuing growth in home sales include low mortgage rates and pent up demand by homebuyers because of the slow economic recovery postponing decisions to buy a home, Pakko said.

"It's a good sign that people have the confidence to take that jump," Pakko said.

Pulaski County was the leading county in home sales in July with 479, the fourth-straight month that Pulaski County had the highest total of home sales.

For the first seven months of the year, 16,493 homes have been sold in Arkansas, up 6.9 percent compared with the same period last year.

That is on pace with Pakko's projected 7 percent improvement in home sales for the year.

"Things are shaping up about how I expected overall," Pakko said.

If there are 7 percent more homes sold this year than last year, that would mean about 29,100 would be sold. That would give Arkansas the best year in home sales since 2007, when more than 30,500 homes were sold.

That was the peak of the housing market in Arkansas, said Marc Fusaro, an associate professor of economics at Arkansas Tech University.

In 2008, the housing market, and the country's overall economy, collapsed.

"But even at that point in 2008, we knew it would take about five years for the housing market to begin to recover," Fusaro said. "That was because of the number of vacant houses we had. The market was overbuilt that much in 2004 through 2006."

The state's housing recovery began last year, when more than 27,200 homes were sold, a 12.7 percent improvement over 2012.

More Americans signed contracts to buy homes in July, the National Association of Realtors said Thursday.

The association's seasonally adjusted pending home sales index rose 3.3 percent to 105.9 last month. Still, the index remains 2.1 percent below its level a year ago.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, called the increase "positive" but stressed that homebuying was unlikely to strengthen significantly.

"Sales cannot rise much more before they hit the fundamental problem that the pool of would-be buyers is just not big enough," Shepherdson said.

Information for this article was contributed by Josh Boak of The Associated Press.

Business on 08/29/2014

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