NAR says its not a demand issue
There was moderate decline in pending home sales in May but it meant the fifth consecutive monthly decline.
The National Association of Realtors says that demand is not the issue, it’s down to low supply. The Pending Home Sales Index was down 0.5% to 105.9 in May from 106.4 in April based on contract signings.
“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,” said NAR chief economist Lawrence Yun, adding that activity has essentially stalled amid low inventory.
Yun says the summer will be a true test of the US housing market with the cost of homeownership rising.
“One encouraging sign has been the increase in new home construction to a 10-year high,” he says. “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.”
Outlook for existing home sales
Yun now forecasts 5.49 million sales of existing homes, down 0.4% year-over-year. The national median home price he says will be up 5%.
If these are proven correct, they would be a moderation from 2017’s 1.1% increase in existing home sales year-over-year; and of the 5.7% rise in median home price appreciation year-over-year.
