Pending home sales in U.S. see 2.8 percent increase in June

WASHINGTON — Pending home sales continued to ascend in June, marking two consecutive months of growth, according to the National Association of Realtors. Each of the four major regions recorded a rise in contract activity, with the West experiencing the highest surge.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, moved up 2.8 percent to 108.3 in June, up from 105.4 in May. Year-over-year contract signings jumped 1.6 percent, snapping a 17-month streak of annual decreases.

Lawrence Yun, chief economist for the NAR, said the 2.8 percent increase can be attributed to the current favorable conditions and predicted that the rise is likely the start of a positive trend for home sales.

“Job growth is doing well, the stock market is near an all-time high, and home

values are consistently increasing,” he said. “When you combine that with the incredibly low mortgage rates, it is not surprising to now see two straight months of increases.”

Yun noted that June’s contract signings indicate that buyers are both enthusiastic about the market and of the potential wealth gain — but he added that homebuilders need to increase inventory.

“Homes are selling at a breakneck pace, in less than a month, on average, for existing homes and three months for newly constructed homes,” Yun said.

“Furthermore, homeowners’ equity in real estate has doubled over the past six years to now nearly $16 trillion,” he said. “But the number of potential buyers exceeds the number of homes available. We need to see sizable growth in inventory, particularly of entry-level homes, to assure wider access to homeownership.”

REGIONAL BREAKDOWN

All of the nation’s regional indices are up from May and from one year ago.

The pending home-sales index in the Northeast part of the country rose 2.7 percent to 94.5 in June and is now 0.9 percent higher than a year ago.

In the Midwest part of the U.S., the index grew 3.3 percent to 103.6 in June, 1.7 percent greater than June 2018.

Pending home sales in the South increased 1.3 percent to an index of 125.7 in June, which is 1.4 percent higher than last June.

The index in the West region of the nation soared 5.4 percent in June to 96.8 and increased 2.5 percent above a year ago.