The National Association of Realtors (NAR) seasonally adjusted pending home sales index declined. Our analysis shows pending home sales is in contraction year-over-year. The quote of the day from this NAR release:
… Realtors in most of the country continue to describe their markets as highly competitive and fast moving, but without enough new and existing inventory for sale, activity has essentially stalled
Analyst Opinion of Pending Home Sales
The rolling averages remain in negative territory. The data is very noisy and must be averaged to make sense of the situation. There is no signs of a surge in home sales, and the long term trends continue to be generally downward.
Pending home sales are based on contract signings, and existing home sales are based on the execution of the contract (contract closing).
The NAR reported:
Econintersect‘s evaluation using unadjusted data:
From Lawrence Yun , NAR chief economist:
…. this year’s spring buying season will go down as one of unmet expectations. Pending home sales underperformed once again in May, declining for the second straight month and coming in at the second lowest level over the past year. Realtors® in most of the country continue to describe their markets as highly competitive and fast moving, but without enough new and existing inventory for sale, activity has essentially stalled.
The lackluster spring has primarily been a supply issue, and not one of weakening demand. If the recent slowdown in activity were because buyer interest is waning, price growth would start slowing, inventory would begin rising and homes would stay on the market longer. Instead, the underlying closing data in May showed that home price gains are still outpacing income growth, inventory declined on an annual basis for the 36th consecutive month, and listings typically went under contract in just over three weeks1.
With the cost of buying a home getting more expensive, it’s clear the summer months will be a true test for the housing market. One encouraging sign has been the increase in new home construction to a 10-year high. Several would-be buyers this spring were kept out of the market because of supply and affordability constraints. The healthy economy and job market should keep many of them actively looking to buy, and any rise in inventory would certainly help them find a home.
Yun forecasts for existing-home sales in 2018 to decrease 0.4 percent to 5.49 million – down from 5.51 million in 2017. The national median existing-home price is expected to increase around 5.0 percent. In 2017, existing sales increased 1.1 percent and prices rose 5.7 percent.
