Pending home sales fell again by 2.7% in May, after remaining steady month-on-month in April, according to data released on Thursday. National Association of Realtors (NAR).
Thank you for reading this post, don't forget to subscribe!Year-to-date, pending home sales declined by 22.2%, a major decrease from the 20.3% annual decline recorded in April.
The NAR’s Pending Home Sales Index fell to 76.5 in May. An index of 100 is equivalent to the level of contract activity in 2001.
“Despite the pending contract signing, the housing market remains resilient with approximately three offers for each listing,” Lawrence Yun, chief economist at NAR, said in a statement. “Housing inventory shortages are preventing housing demand from being fully met.”
However, Yun is optimistic about the impact the increase in housing starts and homebuilders’ confidence will ultimately have on housing inventory.
“It is encouraging that homebuilders have increased production, but supply from new construction takes time and remains insufficient,” Yun said. “More attention should be paid to boosting existing home inventory with temporary tax incentive measures.”
Regionally, on a month-over-month basis, pending home sales all declined in May in the Midwest (74.4), South (94.4), and West (58.4), with the West recording the largest decline of 6.1% done. Northeast (66.7) was the only region to register a monthly increase, growing by 12.9% in May. On an annual basis, all four regions reported declines, with the West recording the largest annual decline of 26.6%.
“After the pandemic, there was expectation that we would see a return to housing market seasonality, but it is going to take at least another year for market conditions to reflect those more normal patterns,” Lisa Sturtevant, chief economist bright mls, said in a statement. “The spring market will extend into summer as buyers have limited options and are waiting for mortgage rates to come down. Market conditions remain surprisingly strong in the Mid-Atlantic, with home prices still rising and homes still selling quickly.”
