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Takeaways:
- Pending home sales fell 1.8 percent in June 2015 from the previous month.
- June 2015 pending home sales are still 8.2 percent above year-ago numbers.
- The share of first-time homebuyers is only modestly improving, said NAR Chief Economist Lawrence Yun.
Pending home sales in June may have backslid slightly from this summer’s hot streak, but sales are still up considerably compared to a year ago, according to the most recent numbers released by the National Association of Realtors.
NAR’s Pending Home Sales Index for June shows that pending home sales slipped, but not by much. They still remained near May’s level, which was the highest in almost a decade, and the index has now increased year over year for 10 consecutive months.
Based on contract signings, the index fell 1.8 percent to 110.3 in June, but is still 8.2 percent above June 2014 and is the third-highest reading this year.
NAR Chief Economist Lawrence Yun said home sales should still continue at a solid pace for the rest of the summer.
“Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers’ comfort level,” Yun said. “The demand is there for more sales, but the determining factor will be whether or not some of these buyers decide to hold off even longer until supply improves and price growth slows.”
The share of first-time homebuyers is only modestly improving, Yun noted, likely due to some sellers just now realizing measurable equity gains after a few years of sluggish home price appreciation.
Selma Hepp, chief economist for Trulia Inc., said first-time buyers have still made a marked comeback, which is promising for the housing market going forward.
“Fears over millennials’ disinterest in homeownership is abating, and the increase in their homeownership rate as indicated in the latest Census (Bureau’s) homeownership survey is a promising gauge for where they stand on homeownership,” Hepp said.
The index also showed modest gains in the Northeast and West, which were offset by larger declines in the Midwest and South:
- The Northeast index inched up 0.4 percent to 94.3 in June, and is now 12 percent above a year ago.
- In the Midwest, the index declined 3 percent to 108.1 in June, but is still 5 percent above June 2014.
- Pending home sales in the South also decreased 3 percent to an index of 123.5 in June, but are still 7.8 percent above last June.
- The index in the West increased 0.5 percent in June to 104.4, and is now 10.4 percent above a year ago.
Jonathan Smoke, chief economist for realtor.com, called these regional differences a “mixed bag” and cautioned, “This is a tricky time of year to assess housing trends, as the housing market is very seasonal.
“The seasonal trend varies by market, so a general interpretation of these numbers should be treated with skepticism,” Smoke said.
