Pending Home Sales Drop In June More Evidence Of A Housing Turnaround

Dated: August 2 2021

Views: 284

Pending sales of existing homes in June as measured by signed contracts fell 1.9% from May, according to the National Association of Realtors.

Sales were also down 1.9% compared with June 2020. Pending sales are a forward-looking indicator of closed sales in one to two months.

“Pending sales have seesawed since January, indicating a turning point for the market,” said Lawrence Yun, Realtors’ chief economist. “Buyers are still interested and want to own a home, but record-high home prices are causing some to retreat.”

Prices in May were up nearly 17% compared with May 2020, according to the latest reading from the S&P Case-Shiller national home price index. That is the largest annual gain on record. Prices in June could very well top that, given the still tight supply of homes for sale, especially on the low end of the market.

Prices are high because inventory has been so low. But that is starting to change. The number of newly listed homes in June rose 5.5% compared with June 2020, according to Realtor.com.

“With prices at record highs and mortgage rates still hovering near record lows, sellers are recognizing the favorable conditions,” said George Ratiu, senior economist at Realtor.com.

Regionally, pending sales increased 0.5% in June compared with May and were up 8.7% from a year ago. In the Midwest, sales rose 0.6% monthly but fell 2.4% annually.

In the South, pending sales fell 3% monthly and 4.7% from June 2020. In the West sales decreased 3.8% monthly and 2.6% annually.

Mortgage rates moved slightly higher at the start of June, which only added to affordability issues. Rates then came down again by the end of the month. Yun is predicting mortgage rates will rise more steadily toward the end of the year.

“This rise will soften demand and cool price appreciation,” he added.

Sales of newly built homes, which are counted by signed contracts, also fell in June, down 6% for the month and nearly 20% year over year, according to the U.S. Census.

Blog author image

Carlos Chavez

The epiphany of a salesmen. Carlos has been in sales all of his life from his first negotiations haggling with his mother for an hour more of time outside with his friends, he learned the importance o....

Want to Advertise on this Site?

Latest Blog Posts

Breaking News From Fannie Mae

Beginning September 18, 2021 Fannie Mae will now allow mortgage lenders to average to the credit scores between 2 borrowers on a loan application.  For example, borrow #1 has a decision making

Read More

Pending Home Sales Drop In June More Evidence Of A Housing Turnaround

Pending sales of existing homes in June as measured by signed contracts fell 1.9% from May, according to the National Association of Realtors.Sales were also down 1.9% compared with June 2020.

Read More

Is The Market Slowing Down

I hope you had a great 4th of JulyIs the market showing the first signs of cooling off?To answer the question...somewhatWhat we are seeing is that the prices can't continue to increase at the rate

Read More

Why The Housing Market Isnt Headed For A Crash

While the housing market has an added spring in its step, fears of a housing crash are certainly there for many professionals in the industry. However, a Bankrate report from Jeff

Read More