Pending home sales climb in June
Pending home sales increased across the four major regions of the country in June, but activity is behind levels from a year ago, the National Association of Realtors (NAR) reported.
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 0.9% to 106.9 in June from 105.9 in May. Contract signings are still down 2.5% on an annual basis, however.
The PHSI in the Northeast increased 1.4% to 93.7 in June but is still 4.1% below a year ago. In the Midwest the index rose 0.5% to 101.9 in June, but is 2.1% lower than June 2017. Pending home sales in the South climbed 1.1% to an index of 124.2 in June, but are 0.3% below a year ago. The index in the West inched forward 0.7% in June to 95.4, but is 5.6% below a year ago.
According to NAR Chief Economist Lawrence Yun, an uptick in existing inventory has provided a boost to contract signings.
“After two straight months of pending sales declines, home shoppers in a majority of markets had a little more success finding a home to buy last month,” Yun said. “The positive forces of faster economic growth and steady hiring are being met by the negative forces of higher home prices and mortgage rates.
But with slightly more homeowners putting their home on the market, inventory is still subpar and not meeting demand, Yun says. “As a result, affordability constraints are pricing out some would-be buyers and keeping overall sales activity below last year’s pace.”
The worst of the housing supply crunch affecting most of the country appears to have passed as well, the NAR says. Total housing inventory at the end of June climbed 4.3% to 1.95 million existing homes available for sale, up 0.5% from a year ago (1.94 million) and the first year-over-year increase since June 2015.
“Home price growth remains swift and listings are still going under contract at a robust pace in most of the country, which indicates that even with rising inventory in many markets, demand still significantly outpaces what’s available for sale,” Yun said. “However, if this trend of increasing supply continues in the months ahead, prospective buyers will hopefully begin to see more choices and softer price growth.”
Heading into the second half of the year, Yun now forecasts for existing-home sales in 2018 to decrease 1% to 5.46 million – down from 5.51 million in 2017. The national median existing-home price is expected to increase around 5%. In 2017, existing sales increased 1.1% and prices rose 5.7%.
The National Association of Realtors represents 1.3 million members involved in all aspects of the residential and commercial real estate industries.
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The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 0.9% to 106.9 in June from 105.9 in May. Contract signings are still down 2.5% on an annual basis, however.
The PHSI in the Northeast increased 1.4% to 93.7 in June but is still 4.1% below a year ago. In the Midwest the index rose 0.5% to 101.9 in June, but is 2.1% lower than June 2017. Pending home sales in the South climbed 1.1% to an index of 124.2 in June, but are 0.3% below a year ago. The index in the West inched forward 0.7% in June to 95.4, but is 5.6% below a year ago.
According to NAR Chief Economist Lawrence Yun, an uptick in existing inventory has provided a boost to contract signings.
“After two straight months of pending sales declines, home shoppers in a majority of markets had a little more success finding a home to buy last month,” Yun said. “The positive forces of faster economic growth and steady hiring are being met by the negative forces of higher home prices and mortgage rates.
But with slightly more homeowners putting their home on the market, inventory is still subpar and not meeting demand, Yun says. “As a result, affordability constraints are pricing out some would-be buyers and keeping overall sales activity below last year’s pace.”
The worst of the housing supply crunch affecting most of the country appears to have passed as well, the NAR says. Total housing inventory at the end of June climbed 4.3% to 1.95 million existing homes available for sale, up 0.5% from a year ago (1.94 million) and the first year-over-year increase since June 2015.
“Home price growth remains swift and listings are still going under contract at a robust pace in most of the country, which indicates that even with rising inventory in many markets, demand still significantly outpaces what’s available for sale,” Yun said. “However, if this trend of increasing supply continues in the months ahead, prospective buyers will hopefully begin to see more choices and softer price growth.”
Heading into the second half of the year, Yun now forecasts for existing-home sales in 2018 to decrease 1% to 5.46 million – down from 5.51 million in 2017. The national median existing-home price is expected to increase around 5%. In 2017, existing sales increased 1.1% and prices rose 5.7%.
The National Association of Realtors represents 1.3 million members involved in all aspects of the residential and commercial real estate industries.
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