Pending Home Sales Decreased Slightly In June

Posted by Patrick Barnard on July 29, 2015 No Comments
Categories : Residential Mortgage

After increasing for five consecutive months, pending home sales fell 1.8% in June compared to May, according to the National Association of Realtors (NAR) pending home sales index.

Despite the drop, pending sales were about 8.2% above the level seen in June 2014.

As of June, pending sales had increased for ten consecutive months, year-over-year, according to NAR.

Modest gains in the Northeast and West were offset by larger declines in the Midwest and South, according to firm's report.

‘Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers' comfort level,’ says Lawrence Yun, chief economist for NAR, in a statement. ‘The demand is there for more sales, but the determining factor will be whether or not some of these buyers decide to hold off even longer until supply improves and price growth slows.’

Yun points out that the number of first-time buyers entering the market has modestly improved, as shown by NAR's recent data on existing home sales. He attributed the recent increase in existing home sales to the fact that more homeowners are realizing the gains they've made during the past few years: Rising home prices has resulted in more homeowners who are ready to sell.

‘Strong price appreciation and an improving economy is finally giving some homeowners the incentive and financial capability to sell and trade up or down,’ Yun says. ‘Unfortunately, because nearly all of these sellers are likely buying another home, there isn't a net increase in inventory. A combination of homebuilders ramping up construction and even more homeowners listing their properties on the market is needed to tame price growth and give all buyers more options.’

NAR forecasts that the national median existing-home price for all housing types will increase by about 6.5% this year to reach $221,900, which would match the record high set in 2006.

Total existing-home sales this year are forecast to increase 6.6% to an annual rate of about 5.27 million, which is about 25% below the prior peak set in 2005, according to NAR.

Register here to receive our Latest Headlines email newsletter

Leave a Comment