After three consecutive months of solid gains, the number of homes under contract to sell slowed modestly in June, according to the NATIONAL ASSOCIATION OF REALTORS®.
NAR’s Pending Home Sales Index, which measures the number of homes that are under contract to sell, where the deal hasn’t yet reached the closing table, dropped 1.1% in June and is down 7.3% compared with this time last year.
The housing market is stabilizing, NAR Chief Economist Lawrence Yun says, but ongoing challenges are impeding full sales potential.
“Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved,” he said. “However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates.”
Despite these headwinds, Yun ultimately expects a slight uptick in sales during the second half of the year.
“The good news is that price appreciation has decreased to its slowest pace since March 2012 behind much needed increases in inventory,” he said. “With rents rising 4% annually, potential buyers are less likely to experience sticker shock and can make smart decisions on whether it makes sense to buy or continue renting.”
Yun forecasts existing-homes sales to be down 2.8% this year to 4.95 million, compared with 5.1 million sales of existing homes in 2013. The national median existing-home price is projected to grow 5% to 6% this year and in 2015.
Pending Home Sales by Region
|June 2014||Compared with June 2013|
|National||Down 1.1%||Down 7.3%|
|Northeast||Down 2.9%||Down 3.2%|
|Midwest||Up 1.1%||Down 5.5%|
|South||Down 2.4%||Down 4.3%|
|West||Up 0.2%||Down 16.7%|