Pending home sales in June fell 5.4% from May levels and were down 0.3% from one year ago, according to a report from the National Association of Realtors (NAR).
A pullback in home sales was anticipated for June after the pace of purchases had reached a five-month high in May. NAR had already released data earlier in July showing existing-home sales slowed 2.4% month over month.
The June gloom, however, proved to be stronger than expected. Month-over-month pending home sales declined in all major regions of the U.S. The steepest fall came in the Midwest, where pending sales between May and June were down 8.9%. But in a sign of how strong home sales had been in recent months, the year-over-year pending sales were still up slightly at 0.3%.
The West and the South both saw pending sales fall 4.1% month over month. In the West, the number of homes under contract fell 1.1% from one year ago, while the South saw year-over-year pending sales decline 0.9%. In the Northeast, sales were down 3% for the month but were up 2.2% from one year ago.
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A sale is listed as pending when the contract has been signed but the transaction has not closed. The sale is usually finalized within the next month or two.
NAR Chief Economist Dr. Lawrence Yun said in a press release that pending contracts are only suggestive of upcoming closed deals, and that the two do not match up perfectly due to fallout rates and contract contingencies.
“The highest mortgage rates in nearly a year and the record-high national median home price together are contributing to a tepid housing market that is especially difficult for first-time homebuyers,” Yun is quoted as saying. “However, job gains can help support housing demand.”
Among the nation’s 50 largest metropolitan areas, year-over-year pending home sales increased the most in the Virginia Beach-Chesapeake-Norfolk area of Virginia and North Carolina, where homes under contract rose by 15.4%. Next was the Sacramento area of California, which was up 15.2%; and the Kansas City metro area, where pending sales increased 14.4%.
