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The US housing market, which picked up last year and then stalled during the economic winter chill, appears to be once again rebounding.
The latest May data from the National Association of Realtors (NAR) released on Monday indicates that contracts (pending) to buy previously owned homes surged to their highest point since September 2013.
The 6.1 per cent increase not only surpassed economic forecasts but also accounted for the largest spike since April 2010 at the peak of the financial crisis in the US.
However, NAR dampened expectations somewhat by forecasting a 2.8 per cent decrease in existing home sales compared to last year.
The housing sector is a critical indicator of how well the economy is doing.
The slowing housing market during the economic chill, which resulted from harsher-than-expected winter months, dragged GDP growth in the first quarter of 2014.
With residential fixed investment falling 5 per cent and subtracting 0.16 percentage point from growth, the Commerce Department last month said that the US economy shrank at an annual rate of 1 per cent.
Many economists had hoped that this year could be a breakout year for US economic growth, after the economy grew at an annual rate of 2.6 percent in the fourth quarter last year.
The NAR report appeared to have little impact on the US stock market; earlier data showing a dip in business activity appeared to keep trading level.
Source: Agencies
