Pending Home Sales Up 5.9% In July, Ahead Of Expectations

The National Association of Realtors reported Thursday that its U.S. Pending Home Sales Index rose 5.9% in the month of July, marking the third straight month of rising home sales. The gain exceeded economist expectations of a 3% increase, according to Reuters.

Booming Market: The housing market has been on fire since emergency interest rates cuts back in March significantly lowered the cost of getting a mortgage. In addition, the work-from-home environment has triggered a boom in housing demand in low-density residential areas outside of major cities and suburbs.

“We are witnessing a true V-shaped sales recovery as homebuyers continue their strong return to the housing market. Home sellers are seeing their homes go under contract in record time, with 9 new contracts for every 10 new listings,” said Lawrence Yun, NAR’s chief economist.

Thursday's news comes a week after the NAR reported a 24.7% increase in existing home sales in the month of July.

Stock Impact: Shares of mortgage giant Rocket Companies Inc RKT initially jumped following the release, but were unable to hold onto their initial gains.

Rocket is the parent company of Quicken Loans and Rocket Mortgage. The company went public in early August after selling IPO shares at $18. The strong housing market and an impressive earnings preannouncement have since propelled the stock to the $27 level.

Benzinga’s Take: Rocket’s first public earnings report expected out on Sept. 2 will likely be pretty noisy due to the temporary housing market boom triggered by the Fed rate cuts in March. Investors should look beyond second-quarter numbers and watching closely for commentary and guidance related to the third-quarter and beyond.

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