Passive home buyers pulled back from a pricey and competitive covering market in May, signing fewer contracts to buy existing homes. A monthly marker of so-called pending home sales from the National Association of Realtors demolish 0.5 percent compared with April and was 2.2 percent deign than May of 2017. The expectation was for a 0.5 percent gain.
Sales secure now fallen on an annual basis for five straight months. Pending bailiwick sales are a forward indicator of closed sales in June and July.
“Realtors in most of the native land continue to describe their markets as highly competitive and fast unstationary, but without enough new and existing inventory for sale, activity has essentially stalled,” affirmed Lawrence Yun, chief economist for the National Association of Realtors.
Regionally, on hold home sales in the Northeast rose 2.0 percent for the month but were 4.8 percent under a year ago. In the Midwest, sales rose 2.9 percent monthly and mow down 2.5 percent annually. Sales in the South declined 3.5 monthly and were unchanged from a year ago. The typography fist in the West rose 0.6 percent compared to April but was 4.1 percent cut than a year ago.
The severe shortage of homes for sale is continuing into this summer, consideration more new listings coming to the market. The supply of homes for sale at the end of May was superior than April, but still 6.1 percent lower than a year ago. The inventory of surviving homes has fallen year-over-year for 36 consecutive months and stood at a 4.1 month cater to given May’s sales pace. A six month supply is considered a balanced call between buyers and sellers.
Tight supply continues to push household prices higher. Higher mortgage rates are also adding to the affordability weight.
“With the cost of buying a home getting more expensive, it’s explicit the summer months will be a true test for the housing market. One supporting sign has been the increase in new home construction to a 10-year high,” united Yun. “Several would-be buyers this spring were kept out of the sell because of supply and affordability constraints.”
Sales may not see gains in June either, agreed-upon the drop in applications for mortgages. Mortgage rates haven’t moved much this month, but mortgage diligences to purchase a home fell 6 percent last week compared with the prior week and were just one percent higher than the same week one year ago, according to the Mortgage Bankers Group.
Closed sales of existing homes also fell in May, with Realtors blaming weaker affordability. Sales marathons of newly built homes, however, jumped unexpectedly higher in May, but the secures were all in the south where builders are busiest and prices are lowest.