In a continuing downtrend, May’s pending home sales slid, declining 2.2 percent for the fifth month in a row (year-over-year), according to the National Association of REALTORS® (NAR) Pending Home Sales Index (PHSI).
Activity decreased 2.5 percent in the Midwest, 4.8 percent in the Northeast and 3.5 percent in the South, but rose 0.6 percent in the West.
“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,” says Lawrence Yun, chief economist at NAR. “REALTORS® in most of the country continue to describe their markets as highly competitive and fast-moving, but without enough new and existing inventory for sale, activity has essentially stalled.
“With the cost of buying a home getting more expensive, it’s clear the summer months will be a true test for the housing market,” Yun says. “One encouraging sign has been the increase in new-home construction to a 10-year high. 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.”
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