Pending Home Sales Cool Off Slightly
Article by Daily Real Estate News | July 30, 2015
After five consecutive months of increases, pending home sales reversed course and dropped in June, a slight ease to what has been a red-hot housing market, according to the National Association of REALTORS®’ Pending Home Sales Index, a forward-looking indicator based on contract signings.
June’s pending home sales, however, remained near May’s level, which was the highest in more than nine years. Pending home sales showed slight gains in the Northeast and West, but were offset by larger declines in the Midwest and South, NAR reports.
Lawrence Yun, NAR’s chief economist, says that despite the dip in pending sales in June the overall trend has been a solid pace of home sales this summer.
“Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers’ comfort level,” Yun says. “The demand is there for more sales, but the determining factor will be whether or not some of these buyers decide to hold off even longer until supply improves and price growth slows.”
The national median existing-home price for all housing types in 2015 is expected to rise about 6.5 percent to $221,900 — which would match the record high set in 2006, NAR reports. A boost in existing-home sales is coming from pent-up sellers who are now realizing equity gains, Yun adds.
“Strong price appreciation and an improving economy is finally giving some home owners the incentive and financial capability to sell and trade up or down,” says Yun. “Unfortunately, because nearly all of these sellers are likely buying another home, there isn’t a net increase in inventory. A combination of homebuilders ramping up construction and even more home owners listing their properties on the market is needed to tame price growth and give all buyers more options.”
Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 073015