"Amidst tight inventory conditions that have lingered the entire summer, contract activity last month was able to pick up at least modestly in a majority of areas," said Lawrence Yun, chief economist for the Realtors. "Buyers still have few choices and little time before deciding to make an offer on a home for sale. There's little doubt there'd be more sales activity right now if there were more affordable listings on the market."
The sales gains were driven entirely by the buyers in the West. Pending sales there jumped 7.3 percent in July compared to June. In contrast, sales rose just 0.8 percent in the Northeast, fell 2.9 percent in the Midwest and edged up 0.8 percent in the South.
Homebuilders had been focused mainly on the higher end of the housing market after the recession, because that was where the bulk of the buyers were. With more demand from younger buyers today, builders are moving slowly back to the entry-level market.
"Realtors in several high-cost areas have been saying for quite a while that there is robust demand for single-family starter homes and town homes at an affordable price point for young buyers," added Yun.