After a slight jump in pending home sales in May, the summer buying season saw lackluster progress in most regions and overall nationwide, according to the National Association of Realtors® (NAR).
NAR released its Pending Home Sales Report for June earlier today, reporting that pending sales decreased by 0.8% from last month and 2.8% since last year.
NAR Chief Economist Lawrence Yun described a “continuation of small declines in contract signings” despite the market inventory increasing.
Both month-over-month and year-over-year pending sales declined in the Midwestern, Southern and Western regions. But the Northeast saw a 2.1% increase month-over-month, yet remains stagnant year-over-year.
“Pending sales in the Northeast increased incrementally even though home price growth in the region has been the strongest in the country,” Yun stated.
The Midwest fell monthly and yearly with 0.8% and 0.9% declines. Pending sales in Southern states decreased 0.7% monthly and 2.9% yearly. Meanwhile, the West had the most severe drop out of all the regions with a 3.9% fall monthly and a 7.3% fall yearly.
Bright MLS Chief Economist Dr. Lisa Sturtevant commented prior to the report’s release that the housing market “is sluggish and that we could end the year with fewer transactions than last year’s 30-year low.”
“It’s not just about mortgage rates. The average rate on a 30-year fixed-rate mortgage was 10 to 15 basis points lower than a year ago, but pending sales activity was still no higher,” she said. “Affordability is a major challenge for homebuyers right now. The median sold price nationally hit a new record high in June, and prices of existing homes are now higher than new-home prices.”
Sturtevant warned about the future of the housing market and looked to the Federal Reserve. “Unfortunately, there is little to suggest any sort of major rebound in home sales as we head into fall,” she continued. “The Federal Reserve has telegraphed no rate cut in July, and even if the central bank did cut rates in September, it is likely that mortgage rates will remain in the mid- to high-6% range amidst continued economic uncertainty.”
Despite the decline in three of the four regions, Yun is optimistic in his outlook.
“The Realtors® Confidence Index shows early indications of potential contract signings increasing moving forward,” he explained. “Realtors® are optimistic that home-buying and -selling activity will increase. That confidence is supported by the fact that mortgage applications have been rising.”
See NAR’s newsroom for the full report.
