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Pending sales hit more than six-year high in May

Jun 28 2013 11:31AM

High home sales levels could be on the way in the Los Angeles real estate market, with the number of properties put under contract on the rise across the country. 

The Pending Home Sales Index, which predicts future closed sales, increased 6.7 percent to 112.3 in May, up from 105.2 in April and a 12.1 percent year-over-year improvement, according to the National Association of Realtors. 

"Even with limited choices, it appears some of the rise in contract signings could be from buyers wanting to take advantage of current affordability conditions before mortgage interest rates move higher," said NAR chief economist Lawrence Yun. "This implies a continuation of double-digit price increases from a year earlier, with a strong push from pent-up demand."

With rates moving higher in the final week of June, there could be a run on homes in the near future, as buyers attempt to lock in the most affordable financing. 

After the Federal Reserve announced it might taper its bond purchases later in the year, both 15- and 30-year fixed-rate mortgages saw averages surge in the week ending June 27, according to Freddie Mac. 

As a result, Palm Springs is likely to see elevated housing activity in the near future. 

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