Falling supplies and higher prices put a lid on pending home sales in June.
According to the National Association of Realtors (NAR), it's Pending Home Sales Index (PHSI) barely budged, but did creep up 0.2% from May to 110.8. That puts the index 1.0% higher than it was a year ago and at its second highest reading over the past 12 months. Nonetheless, the PHSI is down considerably from this year's peak level of 115.0 in April.
"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, leading to the last two months reflecting a slight, early summer cool-down after a very active spring," said NAR Chief Economist Lawrence Yun.
"Unfortunately for prospective buyers trying to take advantage of exceptionally low mortgage rates, housing inventory at the end of last month was down almost 6% percent from a year ago, and home prices are showing little evidence of slowing to a healthier pace that more closely mirrors wage and income growth."
Yun said 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.
Sales by region
- In the Northeast, the PHSI rose 3.2% to 96.0, and is now 1.7% higher than it was a year go
- The index inched up 0.8% in the Midwest to 108.9, and is up 1.6% from June 2015.
- Pending home sales in the South slipped 0.6% to an index reading of 125.9 in June but show a year-over-year gain of 1.8%.
- In the West, the index dropped 1.3% to 101.3, and is now 1.8% below a year ago.