Pending Home Sales Fall 8.6%
Pending home sales decreased in June following a slight increase in May, the National Association of Realtors reported.
All four major regions posted month-over-month and year-over-year pullbacks, the largest of which occurred in the West, the Pending Home Sales Index report said.
The Pending Home Sales Index dipped 8.6% to 91.0 in June. transactions shrank 20.0% year-over-year.
“Contract signings to buy a home will keep tumbling down as long as mortgage rates keep climbing, as has happened this year to date,” said Lawrence Yun, Chief Economist with NAR.
Yun noted he has seen indications that mortgage rates may be topping or very close to a cyclical high in July. “If so, pending contracts should also begin to stabilize,” he said.
NAR said buying a home in June was about 80% more expensive than in June 2019. Nearly a quarter of buyers who purchased a home three years ago would be unable to do so now because they no longer earn the qualifying income to buy a median-priced home today.
“Home sales will be down by 13% in 2022, according to our latest projection,” Yun said. “With mortgage rates expected to stabilize near 6% and steady job creation, home sales should start to rise by early 2023.”