Contracts to buy U.S. previously owned homes rose to a nearly 14-1/2-year high in June, the latest indication that the housing market was weathering the COVID-19 pandemic far better than the broader economy.
The National Association of Realtors said its Pending Home Sales Index, based on contracts signed last month, rose 16.6per cent to 116.1 in June. That was the highest level since January 2006. The housing market is being boosted by historically low mortgage rates, offsetting record unemployment triggered by the coronavirus crisis, which has fallen disproportionately on workers in low-wage industries.
"The spike in COVID-19 infections in states in the South and the West, regions that account for well over 60per cent of existing home sales, may put some downward pressure on sales in the months ahead," said Nancy Vanden Houten, lead economist at Oxford Economics in New York. The rebound in exports was led by a 144.1per cent surge in shipments of motor vehicles and parts. Exports of capital goods soared 11.0per cent and consumer goods jumped 12.6per cent. There were also increases in exports of industrial supplies and other goods, but shipments of food, feeds and beverages fell.
"Even with the narrowing in the deficit between May and June, it widened on average between the first and second quarter so net exports should drag on growth in the second quarter," said Daniel Silver, an economist at JPMorgan in New York.