The nation's real gross domestic product exceeded expectations in the U.S. Bureau of Economic Analysis' second estimate for Q2 released Thursday, expanding at an annual rate of 3.7 percent—an increase from 2.3 percent growth reported in the advance estimate for Q2 last month. Real GDP growth in Q2 is way up from a 0.6 percent annual growth rate in Q1 and is now way ahead of forecasts for the remainder of 2015.
With all components of the GDP improving in the second Q2 estimate, the data suggest that a strong third quarter may be ahead. But as far as housing, Hepp said the economic improvement, quote, may actually put more pressure on affordability because we are still not seeing improvements in inventories. While job growth is generally strong, the wage growth is still lagging. We will see more wage pressures going forward which will help potential buyers’ purchasing power, but that process will be slow. Close quote
The National Association of Realtors' Pending Home Sales Index increased by 0.5 percent to 110.9 in July from an upwardly revised 110.4 in June and is 7.4 percent above 103.3 recorded in July 2014. Additionally, the index has increased year-over-year for 11 consecutive months and July's reading was the third highest reading of 2015, behind April and May. July marked the sixth time in seven months that pending home sales have increased.