The National Association of Realtors (NAR) Wednesday morning released its data on pending sales of existing homes for June. The pending home sales index rose 1.5 points (up 0.5%) to 110.2 from an upwardly revised May reading of 108.6.
June sales rose in three of four NAR’s geographical regions.
The consensus estimate called for a month-over-month increase of 0.9% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.
The index has been above 100 (the “average” reading) for 34 straight months.
The NAR’s chief economist, Lawrence Yun, noted:
The first half of 2017 ended with a nearly identical number of contract signings as one year ago, even as the economy added 2.2 million net new jobs. Market conditions in many areas continue to be fast paced, with few properties to choose from, which is forcing buyers to act almost immediately on an available home that fits their criteria. Low supply is an ongoing issue holding back activity. Housing inventory declined last month and is a staggering 7.1 percent lower than a year ago.
It appears the ongoing run-up in price growth in many areas and less homes for sale at bargain prices are forcing some investors to step away from the market. Fewer investors paying in cash is good news as it could mean a little less competition for the homes first-time buyers can afford. However, the home search will still likely be a strenuous undertaking in coming months because supply shortages in most areas are most severe at the lower end of the market.
By region, June pending home sales increased by 0.7% sequentially to an index score of 98.0 in the Northeast, up 2.9% compared with June 2016. In the South, sales rose 2.1% to an index score of 126.0, 2.6% above last year’s index.
Sales jumped by 2.9% in the West to an index score of 101.5 but remain down 1.1% year over year for the month. Midwest sales fell by 0.5% to 104.0 in June and are now 3.4% below the year-ago total.