Pending home sales slip in June

The Pending Home Sales Index, a forward-looking indicator based on contract signings, fell 1.4% to 99.3 in June from a downwardly revised 100.7 in May but is 9.5% higher than June 2011 when it was 90.7, according to the National Association of Realtors (NAR). The data reflect contracts but not closings.

The index marks 14 consecutive months of year-over-year gains.

“Buyer interest remains strong but fewer home listings mean fewer contract signing opportunities,” said Lawrence Yun, NAR chief economist. “We’ve been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors.” 

According to the Realtors Confidence Index, the buyer traffic index was 60 in June, while the seller index was 41, which shows an imbalance between buyer and seller interest. A value of 50 implies neutral market conditions. 

The PHSI in the Northeast fell 7.6% to 76.6 in June but is 12.2% higher than a year ago. In the Midwest, the index slipped 0.4% to 94.4 in June but is 17.3% above June 2011. Pending home sales in the South declined 2.0% to an index of 106.2 in June but are 8.8% above a year earlier. In the West, the index rose 2.6% in June to 111.5 and is 3.0% higher than June 2011.