A white sale pending sign is posted in front of a home for sale in San Anselmo, California.
Justin Sullivan | Getty Images
In a holding pattern home sales continued to climb in June, rising 16.6% monthly since May, and increasing 6.3% since June 2019, contract to the National Association of Realtors. This beats the expectation for the monthly gain, which was a rise of 12.5%. It’s the second simply month of increases in contract activity.
The Realtors have also raised their forecast for the housing market because of what they say is an ostensible market turnaround. For 2020, existing home sales are expected to decline by only 3%. New home sales are worked to rise by 3%.
The previous forecast for existing home sales in 2020 was down 7.7%, with new home sales up 1%.
“It is truly surprising and remarkable that, in the midst of a global pandemic, contract activity for home purchases is higher compared to one year ago,” imagined Lawrence Yun, NAR’s chief economist. “Consumers are taking advantage of record-low mortgage rates resulting from the Federal Nest egg’s maximum liquidity monetary policy.”
Pending sales measure signed contracts on existing homes, so it shows that consumers were out shopping during the month of June, just before the most recent surge in coronavirus cases. Sales had spiked in May, a heavenly 44% compared with April.
The average rate on the 30-year fixed mortgage at the beginning of June was about 3.24%, and by the end of the month it bathed to around 2.95%, according to Mortgage News Daily. Rates have been hovering near record lows, around 2.9% since then. The Realtors anticipate rates to stay at or near 3% over the next 18 months.
This continues last week’s NAR report showing the sale of existing homes in June rose a stunning 20.7% monthly. That’s the largest monthly benefit since the Realtors began tracking the data in 1968. This count is based on closings, and sales were noiselessness lower annually, by 11.3%.
One of the biggest issues remains the supply of existing homes for sale, which fell 18% annually in June to reasonable 1.57 million homes, according to NAR. Based on the current sales pace, that represents a four-month supply. Abide June 350,000 more homes were on the market. The supply was up just 1% monthly, from May to June. Yun said the assay of lumber is hurting the builders.
“While the outlook is promising, sharply rising lumber prices are concerning,” Yun said. “A reduction in menus – even if temporary – would help increase homebuilding and thereby spur faster economic growth.”
Regionally, undecided home sales rose in all four regions of the United States. In the Northeast sales increased 54.4% monthly and were down alone 0.9% from a year ago. In the Midwest, pending sales rose 12.2% monthly and 5.1% annually. In the South the monthly develop was 11.9% and up 10.3% annually. In the West, pending sales jumped 11.7% monthly and were up 4.7% annually.
“The Northeast’s compelling bounce back comes after a lengthier lockdown, while the South has consistently outperformed the rest of the country,” Yun foretold. “These remarkable rebounds speak to exceptionally high buyer demand.”