After climbing for three straight months, pending home sales dipped slightly in June, held back by inventory shortages in some markets, tight credit and stagnant wages, the National Association of Realtors said today.
NAR’s pending home sales index, a forward-looking indicator that tracks contract signings that usually result in home sales, slipped 1.1 percent from May to June, and was down 7.3 percent from the same time a year ago.
Despite June’s decrease, the pending home sales index remained above 100, an “average” level of contract activity, for the second consecutive month.
NAR Chief Economist Lawrence Yun said he expects sales of existing homes to edge up during the second half of the year, but that sales for the year as a whole will be down 2.8 percent from 2013, a projection that aligns with Fannie Mae’s latest forecast.
Yun said cooling price appreciation and expanding inventory should drive the improvement.
“The good news is that price appreciation has decreased to its slowest pace since March 2012 behind much-needed increases in inventory,” Yun said in a statement. “With rents rising 4 percent annually, potential buyers are less likely to experience sticker shock and can make smart decisions on whether or not it makes sense to buy or continue renting.”
Yun expects that the national median existing-home price should grow between 5 and 6 percent this year and in 2015.