After two months of weakening activity, more single-family properties went under contract than a month earlier — though supply continues to be an albatross for the market. Out front of the improvement was the Northeast.
An indication up upcoming existing home sales based on contract signings, the Pending Home Sales Index, came to 106.9 for the month of June. An index of 100 is equal to the average level of contract activity during 2001.
Compared to the
level for the preceding month’s index, pending home sales were elevated — gaining altitude by 0.9 percent. The improvement followed declines in April and May.
The National Association of Realtors, which reported the data, noted that the index is based on a 20 percent sampling of existing home sales.
NAR Chief Economist Lawrence Yun noted, “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.”
But despite the month-over-month gain, pending home sales have slowed by 2.5 percent from the same month last year. It was the sixth consecutive month that the index has declined on a year-over-year basis.
Leading the increase from May 2018 was the Northeast, where the index climbed 1.4 percent to 93.7. A 1.1 percent rise was recorded for the South, putting that index at 124.2. At 95.4, the index in the West was up 0.7 percent. A 0.5 percent improvement had the Midwest’s index at 101.9.
Yun said that slightly more homeowners are listing
their homes for sale. But still, the inventory is less than ideal, and many potential homebuyers are being priced out of the market. He suspects, however, the peak of the supply shortage has passed.
“The positive forces of faster economic growth and steady hiring are being met by the negative forces of higher home prices and mortgage rates,” Yun explained.
