June Pending Home Sales Index Slips

House for Sale
House for Sale

The National Association of Realtors (NAR) this morning released its data on pending sales of existing homes in June. The pending home sales index slipped 0.4% from a downwardly revised 111.3 in May to 110.9, and it is 10.9% higher than in June 2012, when the index reading was 100.0. The consensus estimate called for a decrease of 1.4% 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 May index was the highest reading in more than six years, since a reading of 112.8 in December of 2006.

Total existing home sales are expected to rise more than 8% year-over-year in 2013, down from last month's projection for an increase of 8.5% to 9%. National median home prices are forecast to rise by 11% this year, primarily due to the inventory shortage of existing homes for sale. The median price forecast is up from an increase of 10% projected last month.

The NAR's chief economist noted:

Mortgage interest rates began to rise in May, taking some of the momentum out of contract activity in June. The persistent lack of inventory also is contributing to lower contract signings.

Pending home sales in the northeastern United States were unchanged in June, posting an index reading of 87.2, up 12.2% from June 2012. The index rose slipped 1% in the Midwest and 2.1% in the South. The index rose 3.3% in the West. Compared with the pending sales index in June a year ago, the Midwest is up 19.5%, the South is up 9.5% and the West is up 4.4%.

Filed under: Housing