Pending home sales decline in May
Pending home sales slumped in May and have now fallen on an annualized basis for the fifth straight month, the National Association of Realtors (NAR) reported today.
The NAR’s Pending Home Sales Index, which is based on based on contract signings, decreased 0.5% to 105.9 in May from 106.4 in April. A steeper decline in the South offset gains in the Northeast, Midwest, and West.
“Realtors in most of the country continue to describe their markets as highly competitive and fast moving, but without enough new and existing inventory for sale, activity has essentially stalled,” said Lawrence Yun, NAR chief economist.
Yun attributes the soft spring season to a supply issue, and not one of weakening demand. The latest data points to home price gains outpacing income growth as inventory declined on an annual basis for the 36th consecutive month. Listings typically went under contract in just over three weeks, the NAR said.
“With the cost of buying a home getting more expensive, it’s clear the summer months will be a true test for the housing market. One encouraging sign has been the increase in new home construction to a 10-year high,” added Yun.
Would-be buyers this spring were kept out of the market because of supply and affordability constraints.
Yun now forecasts for existing-home sales in 2018 to decrease 0.4% to 5.49 million – down from 5.51 million in 2017. The national median existing-home price is expected to increase around 5% percent. In 2017, existing sales increased 1.1% and prices rose 5.7%.
The PHSI in the Northeast increased 2% to 92.4 in May, but is still 4.8% below a year ago. In the Midwest the index rose 2.9% to 101.4 in May but is still 2.5% lower than May 2017.
Pending home sales in the South declined 3.5% to an index of 122.9 in May (unchanged from a year ago). The index in the West inched forward 0.6% in May to 94.7, but is 4.1% below a year ago.
Sales of newly built, single-family homes increased 6.7% in May to a seasonally adjusted annual rate of 689,000 units after a downwardly revised April report, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported earlier this week.
The NAR’s Pending Home Sales Index, which is based on based on contract signings, decreased 0.5% to 105.9 in May from 106.4 in April. A steeper decline in the South offset gains in the Northeast, Midwest, and West.
“Realtors in most of the country continue to describe their markets as highly competitive and fast moving, but without enough new and existing inventory for sale, activity has essentially stalled,” said Lawrence Yun, NAR chief economist.
Yun attributes the soft spring season to a supply issue, and not one of weakening demand. The latest data points to home price gains outpacing income growth as inventory declined on an annual basis for the 36th consecutive month. Listings typically went under contract in just over three weeks, the NAR said.
“With the cost of buying a home getting more expensive, it’s clear the summer months will be a true test for the housing market. One encouraging sign has been the increase in new home construction to a 10-year high,” added Yun.
Would-be buyers this spring were kept out of the market because of supply and affordability constraints.
Yun now forecasts for existing-home sales in 2018 to decrease 0.4% to 5.49 million – down from 5.51 million in 2017. The national median existing-home price is expected to increase around 5% percent. In 2017, existing sales increased 1.1% and prices rose 5.7%.
The PHSI in the Northeast increased 2% to 92.4 in May, but is still 4.8% below a year ago. In the Midwest the index rose 2.9% to 101.4 in May but is still 2.5% lower than May 2017.
Pending home sales in the South declined 3.5% to an index of 122.9 in May (unchanged from a year ago). The index in the West inched forward 0.6% in May to 94.7, but is 4.1% below a year ago.
Sales of newly built, single-family homes increased 6.7% in May to a seasonally adjusted annual rate of 689,000 units after a downwardly revised April report, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported earlier this week.