Pending Home Sales Step Back in June
(Illustration courtesy of National Association of Realtors)
Pending home sales in June decreased by 5.4% month-over-month and 0.3% year-over-year, the National Association of Realtors reported Thursday.
The NAR Pending Home Sales report said month-over-month pending home sales declined in all four major U.S. regions. Year-over-year pending home sales increased in the Northeast and Midwest but declined in the South and West.
“The highest mortgage rates in nearly a year and the record-high national median home price together are contributing to a tepid housing market that is especially difficult for first-time homebuyers,” NAR Chief Economist Lawrence Yun said. “However, job gains can help support housing demand.”
Yun noted that closing activity generates economic impact, not contract signings. “Pending contracts are only suggestive of upcoming closed deals and do not align perfectly, due to fallout rates and contract contingencies,” he said.
Sam Williamson, senior economist with First American, said home buyers “took a step back in June” after a burst of resilience in the spring. “With mortgage rates climbing to their highest level in nearly a year and home prices still elevated, the math simply got harder to make work, especially for first-time buyers,” he added
“The bigger picture is a housing market recovery that remains intact but is still waiting for a catalyst,” Williamson said. “The structural supports are in place, an easing lock-in effect, a resilient labor market, and favorable demographics, but none is strong enough on its own to draw sidelined buyers back while financing costs hover near a one-year high. Until rates ease enough to move the affordability math, the recovery is likely to keep progressing at a measured pace.”
At the local level, NAR reported that several markets posted notable year-over-year gains in pending home sales. Among the 50 largest metro areas, the following markets posted the biggest annual increases in pending home sales:
Virginia Beach-Chesapeake-Norfolk, Va.-N.C. (+15.4%)
Sacramento-Roseville-Folsom, Calif. (+15.2%)
Kansas City, Mo.-Kansas (+14.4%)
Richmond, Va. (+14.0%)
Buffalo-Cheektowaga, N.Y. (+12.1%)
