June Pending Home Sales Dip 1.9%

Pending home sales declined marginally in June after a sizable gain in May, the National Association of Realtors reported Thursday.

The Pending Home Sales Index (www.nar.realtor/pending-home-sales), a forward-looking indicator of home sales based on contract signings, fell 1.9% to 112.8 in June. Year-over-year, signings also slipped 1.9%.

Regionally, results were mixed. Pending home sales transactions in the South fell 3.0% to 132.4 in June and fell by 4.7% from a year ago. In the West, pending sales fell by 3.8% in June to 98.1 and by 2.6% from a year prior.

In the Northeast, pending home sales increasedby  0.5% to 98.5 in June and improved by 8.7% from a year ago. In the Midwest, the index rose by 0.6% to 108.3 but fell by 2.4% from a year ago.

“Pending sales have seesawed since January, indicating a turning point for the market,” said Lawrence Yun, NAR chief economist. “Buyers are still interested and want to own a home, but record-high home prices are causing some to retreat.”

Yun attributed the moderate slowdown in sales to a spike in home prices. “The Midwest region offers the most affordable costs for a home and hence that region has seen better sales activity compared to other areas in recent months…in just the last year, increasing home prices have translated into a substantial wealth gain of $45,000 for a typical homeowner. These gains are expected to moderate to around $10,000 to $20,000 over the next year.”