Pending Sales of Existing Homes Rise Less Than Forecast

Contracts to purchase previously owned homes rose less than forecast in June as a lack of supply and rising prices offset the benefits from historically low mortgage rates, according to figures released Wednesday from the National Association of Realtors in Washington.

Pending home sales gauge rose 0.2% after falling 3.7% the prior period (the median forecast in a Bloomberg survey of economists was 1.2% gain). The index saw a 0.3% rise compared to June 2015 on an unadjusted basis (the forecast was a 3% increase). Pending sales climbed 3.2% in the Northeast and 0.8% in the Midwest.

The leveling off in pending home sales comes on the heels of reports showing existing-home sales jumped in June to its highest level since 2007 and the strongest new-home demand in eight years.

The Realtor's group said last week that sales have probably peaked for the year as prospective buyers don't have enough homes from which to choose, forcing up property values. That's mitigated the positive influence of mortgage rates that are close to record lows.

"Until inventory conditions markedly improve, far too many prospective buyers are likely to run into situations of either being priced out of the market or outbid on the very few properties available for sale," NAR chief economist Lawrence Yun said in a statement.

"With only the Northeast region having an adequate supply of homes for sale, the reoccurring dilemma of strained supply causing a run-up in home prices continues to play out in several markets."

Purchases fell 1.3% in the West and 0.6% in the South.

Bloomberg News
Originations Real estate Purchase
MORE FROM NATIONAL MORTGAGE NEWS