Pending home sales were basically flat in June, rising just 0.2% compared with May, according to the National Association of Realtors’ (NAR) Pending Home Sales Index.
Once again, lack of inventory and affordability constraints were the main factors dampening pending home sales, NAR says. Perhaps the only thing that helped keep pending home sales out of the red was the super-low mortgage interest rates.
The slight increase in activity brought the index score to 111.0, up from 110.8 in May.
That’s only 1.0% higher compared with June 2015, when the index score was 109.9.
Lawrence Yun, chief economist for NAR, says a solid bump in activity in the Northeast helped boost pending sales in June.
“With only the Northeast region having an adequate supply of homes for sale, the reoccurring dilemma of strained supply causing a run-up in home prices continues to play out in several markets, leading to the last two months reflecting a slight, early summer cooldown after a very active spring,” Yun says in a statement. “Unfortunately for prospective buyers trying to take advantage of exceptionally low mortgage rates, housing inventory at the end of last month was down almost six percent from a year ago – and home prices are showing little evidence of slowing to a healthier pace that more closely mirrors wage and income growth.
“Until inventory conditions markedly improve, far too many prospective buyers are likely to run into situations of either being priced out of the market or outbid on the very few properties available for sale,” Yun adds.
Despite the slight slowdown in June, NAR is forecasting that existing-home sales this year will reach 5.44 million, an increase of 3.6% compared with June 2015.
NAR predicts that home prices will increase an average of 4% nationally over the next 12 months.