Pending home sales rose to their highest level in three months this June, the National Association of Realtors (NAR) reported Wednesday.
All four U.S. regions posted monthly gains in transactions, with pending sales overall coming in 4.8% higher than May’s figure.
Year over year, the Northeast, Midwest and South registered declines, while the West increased, the NAR reported.
"The rise in housing inventory is beginning to lead to more contract signings," Chief Economist Lawrence Yun said. "Multiple offers are less intense, and buyers are in a more favorable position."
The Pending Home Sales Index (PHSI) grew to 74.3 in June, with pending transactions down 2.6% YOY. The Northeast PHSI ascended 3% from last month to 65.5, a decline of 0.3% from June 2023. The Midwest index rose 4.7% to 73.7 in June, down 4.2% from one year ago.
The South PHSI increased 6.3% to 89.3 in June, dropping 3.9% from the prior year. The West index climbed 3.4% in June to 58.4, up 1% from June 2023.
“Purchase mortgage applications, another leading indicator of sales activity, also picked up in June, but have since slid in July," commented First American Deputy Chief Economist Odeta Kushi. "Buyers are still feeling very cautious and affordability remains constrained. Mortgage rates remain in the high 6's and house prices continue to reach new heights nationally. The payment-to-paycheck calculation still doesn't pencil out for a lot of buyers.”
Looking forward, Yun anticipates the nation’s housing shortage to see some reprieve later this year.
"Even more inventory is expected to come onto the housing market in the upcoming months ahead of the normal, seasonal declines in the winter," he explained. "The Northeast's small gain in contract signings is due to the ongoing housing shortage situation in that region, leading to stronger home price gains. It is a good time to list."
