Higher Prices Drove Pending Home Sales Down 1.9% in June
Washington, D.C., July 30, 2021- Pending home sales declined marginally in June after recording a notable gain in May, according to the the National Association of Realtors (NAR). Compared to May, June contract signings rose in the Northeast and Midwest but fell in the South and West. The only yearly gains came from the Northeast.
The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, fell 1.9% to 112.8 in June. Year-over-year, signings also slipped 1.9%. An index of 100 is equal to the level of contract activity in 2001.
"Pending sales have seesawed since January, indicating a turning point for the market," said Lawrence Yun, NAR's chief economist. "Buyers are still interested and want to own a home, but record-high home prices are causing some to retreat. The moderate slowdown in sales is largely due to the huge spike in home prices. The Midwest region offers the most affordable costs for a home and hence that region has seen better sales activity compared to other areas in recent months."
The Northeast PHSI increased 0.5% to 98.5 in June, an 8.7% rise from a year ago. In the Midwest, the index grew 0.6% to 108.3 last month, down 2.4% from June 2020. Pending home sales transactions in the South fell 3.0% to an index of 132.4 in June, down 4.7% from June 2020. And the index in the West decreased 3.8% in June to 98.1, down 2.6% from a year prior.