Pending home sales slip in July
Pending home sales fell in July and have now slumped for 7 straight months on an annual basis, according to the National Association of Realtors (NAR).
The Pending Home Sales Index (PHSI) decreased 0.7% to 106.2 in July from 107.0 in June. Contract signings are now down 2.3% year-over-year the NAR said. The index is a forward-looking indicator based on contract signings.
“Contract signings inched backward once again last month, as declines in the South and West weighed down on overall activity,” said Lawrence Yun, chief economist of the NAR. “It’s evident in recent months that many of the most overheated real estate markets – especially those out West – are starting to see a slight decline in home sales and slower price growth.”
Regionally, the PHSI rose 1% in the Northeast 94.6 in July, but is 2.3% below a year ago. In the Midwest the index inched up 0.3% to 102.2 in July, but is 1.5% lower than July 2017.
Pending home sales in the South declined 1.7% to an index of 122.1 in July, and are 0.9% below a year ago while the PHSI in the West fell 0.9% and is now 5.8% below a year ago.
“The reason sales are falling off last year’s pace is that multiple years of inadequate supply in markets with strong job growth have finally driven up home prices to a point where an increasing number of prospective buyers are unable to afford it,” Yun explained.
Increasing inventory in several large metro areas, particularly in the West, is forecast to cool off price growth to more affordable levels going forward. Denver; Santa Rosa and the San Jose-Sunnyvale-Santa Clara, Calif. market; Seattle; Nashville, Tenn.; and Portland, Ore. were among the large markets seeing a rise in active listings in July compared to a year ago.
“Rising inventory levels – especially if new home construction finally starts picking up – should help slow price appreciation to around two-and-four percent, which will help aspiring first-time buyers, and be good for the long-term health of the nation’s housing market,” said Yun.
Yun expects existing-home sales this year to decrease 1% to 5.46 million, and the national median existing-home price to increase around 5%. Looking ahead to next year, existing sales are forecast to increase 2% and home prices around 3.5%.
Based in Chicago, the NAR represents.3 million members involved in all aspects of the residential and commercial real estate industries.
The Pending Home Sales Index (PHSI) decreased 0.7% to 106.2 in July from 107.0 in June. Contract signings are now down 2.3% year-over-year the NAR said. The index is a forward-looking indicator based on contract signings.
“Contract signings inched backward once again last month, as declines in the South and West weighed down on overall activity,” said Lawrence Yun, chief economist of the NAR. “It’s evident in recent months that many of the most overheated real estate markets – especially those out West – are starting to see a slight decline in home sales and slower price growth.”
Regionally, the PHSI rose 1% in the Northeast 94.6 in July, but is 2.3% below a year ago. In the Midwest the index inched up 0.3% to 102.2 in July, but is 1.5% lower than July 2017.
Pending home sales in the South declined 1.7% to an index of 122.1 in July, and are 0.9% below a year ago while the PHSI in the West fell 0.9% and is now 5.8% below a year ago.
“The reason sales are falling off last year’s pace is that multiple years of inadequate supply in markets with strong job growth have finally driven up home prices to a point where an increasing number of prospective buyers are unable to afford it,” Yun explained.
Increasing inventory in several large metro areas, particularly in the West, is forecast to cool off price growth to more affordable levels going forward. Denver; Santa Rosa and the San Jose-Sunnyvale-Santa Clara, Calif. market; Seattle; Nashville, Tenn.; and Portland, Ore. were among the large markets seeing a rise in active listings in July compared to a year ago.
“Rising inventory levels – especially if new home construction finally starts picking up – should help slow price appreciation to around two-and-four percent, which will help aspiring first-time buyers, and be good for the long-term health of the nation’s housing market,” said Yun.
Yun expects existing-home sales this year to decrease 1% to 5.46 million, and the national median existing-home price to increase around 5%. Looking ahead to next year, existing sales are forecast to increase 2% and home prices around 3.5%.
Based in Chicago, the NAR represents.3 million members involved in all aspects of the residential and commercial real estate industries.