In June, pending home sales saw a spike, rising 4.8%, according to new data released by the National Association of REALTORS® (NAR)—a turnaround from three consecutive months of decline.
Mortgage rates “fell through the month, dipping below 7% and continuing to fall to 6.86% by the end of the month,” explained Realtor.com® Sr. Economic Research Analyst Hannah Jones in a statement. And, active listings jumped 36.7% annually in June as a result. Both new- and existing-home inventory rose.
“The persistent increase in inventory is reflected in the increase in contract signings. Though the recent pick-up in inventory is great news for buyers, active listings remain well below pre-pandemic levels, which has kept home prices elevated and has pushed many would-be buyers out of the market,” Jones explained.
Adding to Jones’ statement, NAR Chief Economist Lawrence Yun described how a rising inventory of homes is beginning to lead to further contract signings, and “multiple offers are less intense, and buyers are in a more favorable position.”
Additionally, all four U.S. regions posted monthly gains in pending sales, although year-over-year, the West was the only region to increase. In total, pending transactions were down 2.6% year-over year.
“The housing market continues to vary regionally,” Jones said. “Contract signings increased monthly by 6.3% in the South, 4.7% in the Midwest, 3.4% in the West and 3% in the Northeast.”
Bright MLS Chief Economist Lisa Sturtevant noted that the number of pending sales in June certainly would have been higher had it not been for homebuyers awaiting lower mortgage rates.
“Buyers likely will also have more options to choose from later this fall. The market will move toward more of a balanced housing market in the second half of the year, but prospective homebuyers will still face competition.”
Yun concluded by confirming the likely occurrence of an influx in inventory as a legitimate possibility in the coming months, much to the pleasure of prospective buyers nationwide.
“Even more inventory is expected to come onto the housing market in the upcoming months ahead of the normal, seasonal declines in the winter,” added Yun. “The Northeast’s small gain in contract signings is due to the ongoing housing shortage situation in that region, leading to stronger home price gains. It is a good time to list.”
