All major regions, except for the Midwest, saw more contract signings in June
A measure of pending home sales has bounced back in June after posting declines for the previous three months, according to the National Association of Realtors (NAR).
An increase in contract signings across major regions, except the Midwest, drove the 1.5% increase in the pending home sales index to 110.2 from the upwardly revised 108.6 index in May. The June index represents the first annual increase since March, a 0.5% increase.
"The first half of 2017 ended with a nearly identical number of contract signings as one year ago, even as the economy added 2.2 million net new jobs," said Lawrence Yun, chief economist at NAR. "Market conditions in many areas continue to be fast-paced, with few properties to choose from, which is forcing buyers to act almost immediately on an available home that fits their criteria."
Although activity remains held back by the ongoing low supply, Yun said first-time buyers can expect a potential entry point into the market in the coming months. June saw the year’s lowest share of sales to investors at 13%, which as a result drove down the share of all cash transactions to 18%, the lowest share since June 2009.
"It appears the ongoing run-up in price growth in many areas and less homes for sale at bargain prices are forcing some investors to step away from the market," Yun said. "Fewer investors paying in cash is good news, as it could mean a little less competition for the homes first-time buyers can afford. However, the home search will still likely be a strenuous undertaking in coming months because supply shortages in most areas are most severe at the lower end of the market."
For the rest of 2017, Yun expects existing-home sales to total 5.56 million, or a 2.6% increase from the 5.45 million sales in 2016. The national median existing-home price is forecast to grow around 5% in 2017. These figures compared to the 3.8% increase in existing-home sales and 5.1% growth in prices recorded in 2016.
On a regional basis, the pending home sales index increased in the Northeast by 0.7% to 98.0, the South by 2.1% to 126.0, and the West by 2.9% to 101.5. The index fell in the Midwest by 0.5% to 104.0 during the month, also falling from the year-ago index by 3.4%.
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An increase in contract signings across major regions, except the Midwest, drove the 1.5% increase in the pending home sales index to 110.2 from the upwardly revised 108.6 index in May. The June index represents the first annual increase since March, a 0.5% increase.
"The first half of 2017 ended with a nearly identical number of contract signings as one year ago, even as the economy added 2.2 million net new jobs," said Lawrence Yun, chief economist at NAR. "Market conditions in many areas continue to be fast-paced, with few properties to choose from, which is forcing buyers to act almost immediately on an available home that fits their criteria."
Although activity remains held back by the ongoing low supply, Yun said first-time buyers can expect a potential entry point into the market in the coming months. June saw the year’s lowest share of sales to investors at 13%, which as a result drove down the share of all cash transactions to 18%, the lowest share since June 2009.
"It appears the ongoing run-up in price growth in many areas and less homes for sale at bargain prices are forcing some investors to step away from the market," Yun said. "Fewer investors paying in cash is good news, as it could mean a little less competition for the homes first-time buyers can afford. However, the home search will still likely be a strenuous undertaking in coming months because supply shortages in most areas are most severe at the lower end of the market."
For the rest of 2017, Yun expects existing-home sales to total 5.56 million, or a 2.6% increase from the 5.45 million sales in 2016. The national median existing-home price is forecast to grow around 5% in 2017. These figures compared to the 3.8% increase in existing-home sales and 5.1% growth in prices recorded in 2016.
On a regional basis, the pending home sales index increased in the Northeast by 0.7% to 98.0, the South by 2.1% to 126.0, and the West by 2.9% to 101.5. The index fell in the Midwest by 0.5% to 104.0 during the month, also falling from the year-ago index by 3.4%.
Related stories:
Pending home sales index down 1.7% year-over-year
California sees decline in pending home sales
