Pending homes sales up across the US in June, but still down year on year
Pending home sales in the United States increased in all four major regions in June, but overall activity lagged year ago levels for the sixth straight month, the latest index report shows.
Despite the increase contract signings are still down 2.5% on an annual basis and it was an uptick in existing inventory that helped them rise in June, according to the report from the National Association of Realtors (NAR).
‘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. ‘The positive forces of faster economic growth and steady hiring are being met by the negative forces of higher home prices and mortgage rates,’ said Lawrence Yun, NAR chief economist.
‘Even with slightly more home owners putting their home on the market, inventory is still subpar and not meeting demand. As a result, affordability constraints are pricing out some would-be buyers and keeping overall sales activity below last year’s pace,’ he explained.
According to Yun, the good news is that it is possible the worst of the supply crunch affecting most of the country has passed. Last month, existing inventory was up on an annual basis, albeit slightly, for the first time in three years.
Data also shows that year on year several large metro areas saw big jumps in active listings in June, including Portland in Oregon up 24%, Providence in Rhode Island up 20%, Seattle up 19%, Nashville up 17% and San Jose in California up 15%.
‘Home price growth remains swift and listings are still going under contract at a robust pace in most of the country, which indicates that even with rising inventory in many markets, demand still significantly outpaces what’s available for sale,’ Yun said.
‘However, if this trend of increasing supply continues in the months ahead, prospective buyers will hopefully begin to see more choices and softer price growth,’ he warned.
Heading into the second half of the year, Yun now forecasts for existing-home sales in 2018 to decrease by 1% to 5.46 million, down from 5.51 million in 2017. The national median existing home price is expected to increase around 5%. This compares with a rise in existing sales of 1.1% in 2017 and price growth of 5.7%.
Sales in the Northeast increased 1.4% in June, but are still 4.1% below a year ago while in the Midwest they rose by 0.5% but are 2.1% lower than June 2017. Sales in the South increased by 1.1% but are 0.3% below a year ago and in the West they were up by 0.7% but are 5.6% below a year ago.