Pending home sales recorded a mild 0.3% uptick from May to June, according to new data from the National Association Realtors (NAR). This marked the first month-over-month increase since February. However, on a year-over-year measurement, pending transactions were down by 15.6%.
NAR’s Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, reached 76.8 in June. An index of 100 is equal to the level of contract activity in 2001. On a regional basis, the PHSI for the Northeast and Midwest were up from the previous month but the South and West were down – all four regions recorded year-over-year declines.
“The recovery has not taken place, but the housing recession is over,” said NAR Chief Economist Lawrence Yun, “The presence of multiple offers implies that housing demand is not being satisfied due to lack of supply. Homebuilders are ramping up production and hiring workers. With consumer price inflation calming close to the Federal Reserve’s desired conditions, mortgage rates look to have topped out. Given the ongoing job additions, any meaningful decline in mortgage rates could lead to a rush of buyers later in the year and into the next.”
