Pending home sales nearly flat in June
Pending home sales were nearly flat in June, the National Association of Realtors (NAR) reported this morning.
The latest Pending Home Sales Index increased just 0.3% to 76.8 in June compared to the prior month while all four major regions of the nation saw year-over-year declines. The index’s slight rise marked the first increase in four months.
Year over year, pending transactions fell by 15.6%. An index of 100 is equal to te level of contract activity in 2001. The index is a forward-looking indicator of home sales based on contract signings.
“The recovery has not taken place, but the housing recession is over,” said NAR Chief Economist Lawrence Yun, “The presence of multiple offers implies that housing demand is not being satisfied due to lack of supply. Homebuilders are ramping up production and hiring workers.”
NAR forecasts that the 30-year fixed mortgage rate will hit 6.4% this year and then decline to 6% in 2024, while the unemployment rate will rise slightly to 3.7% in 2023 before increasing to 4.1% in 2024.
“With consumer price inflation calming close to the Federal Reserve’s desired conditions, mortgage rates look to have topped out,” Yun added. “Given the ongoing job additions, any meaningful decline in mortgage rates could lead to a rush of buyers later in the year and into the next.”
Additionally, the NAR said it expects existing-home sales to decrease 12.9% from 2022 to 2023, settling at 4.38 million, before climbing 15.5%, to 5.06 million in 2024.
On a year-over-year basis, the national median existing-home price is forecast to decline just 0.4% to $384,900 before rising by 2.6% next year, to $395,000.
“It is critical to expand supply as much as possible to widen access to homebuying for more Americans,” Yun said. “Home prices will be influenced by how much inventory is brought to market. Increased homebuilding will tame price growth, while limited construction will lead to home price appreciation outpacing income growth.”e to 57.7, dipping 15.5% from May 2022.
Additionally, the NAR said it expects existing-home sales to decrease 12.9% from 2022 to 2023, settling at 4.38 million, before climbing 15.5%, to 5.06 million in 2024.
On a year-over-year basis, the national median existing-home price is forecast to decline just 0.4% to $384,900 before rising by 2.6% next year, to $395,000.
“It is critical to expand supply as much as possible to widen access to homebuying for more Americans,” Yun said. “Home prices will be influenced by how much inventory is brought to market. Increased homebuilding will tame price growth, while limited construction will lead to home price appreciation outpacing income growth.”
The NAR has also said that newly constructed home sales will increase 12.3% in 2023, to 720,000 – due to additional inventory in the market – and increase by another 13.9% in 2024, to 820,000.
According to the association, the national median new home price will decrease by 1.9% this year, to $449,100, and then improve by 4.2% next year, to $468,000.
Yesterday, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported new home sales fell 2.5% to a seasonally adjusted annual rate of 697,000 from the revised May rate of 715,000.
Here’s how pending home sales performed on a regional basis:
- The Northeast PHSI ascended 0.6% from last month to 67.1, a decrease of 16.7% from June 2022.
- The Midwest index jumped 4.3% to 77.6 in June, down 17.1% from one year ago.
- The South PHSI receded 1.4% to 93.3 in June, lessening 14.3% from the prior year.
- The West index fell 1.0% in June to 57.7, dipping 15.5% from May 2022.
