Pending home sales drop for second consecutive month
The real estate market could cool down.
Pending home sales, a leading indicator of the health of the housing market, fell 1.8% in July, the second consecutive month of decline. The National Association of Realtors (NAR) Pending Home Sales Index, which tracks the number of homes under contract for sale, fell 1.8% in July from the previous month. The results missed the expected 0.4% sales increase, according to consensus estimates by analysts at Bloomberg.
“The market may be starting to cool slightly, but at the moment the supply is not sufficient to meet the demand of potential buyers,” Lawrence Yun, chief economist of NAR, said in a statement. hurry.
All four regions of the United States reported a year-over-year decline in pending home sales, which is an indicator of home sales likely to occur in one to two months. The only region to show an increase in sales from a month ago was the West, where pending sales rose 1.9% in July from June. But sales in the West are down 5.7% from a year ago. Pending sales in the Northeast region were down 6.6% and 16.9% – the largest monthly and year-over-year declines, respectively, since the data was tracked .
“There is always a lot of interest in homes listed for sale, but the multiple and frenzied offers – sometimes double-digit offers on a property – have worn off in most areas,” Yun said.
The number of homes for sale at the end of July stood at 1.32 million units, up 7.3% from the June supply but still down 12% from a year ago. one year, according to the NAR. Morgan Stanley analysts recently said it would take an additional 1 million to 1.5 million listings to bring the market back to its historic average number of homes available for sale.
Despite the slowdown, relief may be on the way. “Inventories are slowly rising and home buyers should start to see more options in the coming months,” said Yun, who noted last month that he expects stocks to continue to rise. improve throughout the year.
The latest weekly data from Realtor.com also reveals more new home listings in 19 of the past 22 weeks, compared to the same time period in 2020. The real estate company said owners are responding to market trends and have started to register more dwellings.
Historically low inventory has pushed home prices to record highs. Standard & Poor’s said on Tuesday that its national S&P CoreLogic Case-Shiller home price index posted an annual gain of 16.6% in May, up from 14.8% in April – marking the highest reading in more than 30 years of data.
“In a typical year, summer represents the peak period of home buying activity, especially for families who wish to move to a new school district before the start of the next school year,” said George Ratiu, director of economic research at Realtor.com, said in a statement ahead of the results. “The highly competitive real estate market we saw in the first six months of 2021 reduced available inventory to record levels and pushed prices to new highs just as summer was emerging, leaving many buyers to ‘a first home feeling frustrated. “
Amanda Fung is a writer at Yahoo Finance.
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