- May's pending home sales dipped 1.7 percent to 108.5 thanks to inventory shortages and rising home prices.
NAR chief economist Lawrence Yun says low inventory levels have “somewhat sidetracked” the spring buying season, and dampened financial and economic confidence may have a factor in dipping pending home sales as well.
“Monthly closings have recently been oscillating back and forth, but this third consecutive decline in contract activity implies a possible topping off in sales,” Yun said. “Buyer interest is solid, but there is just not enough supply to satisfy demand. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast.”
“The lack of listings in the affordable price range are creating lopsided conditions in many areas where investors and repeat buyers with larger down payments are making up a bulk of the sales activity,” he added. “Meanwhile, many prospective first-time buyers can’t catch a break. Prices are going up and there’s intense competition for the homes they’re financially able to purchase.”
Regional breakdown
- Northeast: PHSI declined 0.8 percent to 96.4 in May, 3.1 percent above a year ago.
- Midwest: PHSI was 104.5 in May, unchanged from April and 2.8 percent lower than May 2016.
- South: PHSI declined 1.2 percent to 123.4 in May, down 1.4 percent year-over-year.
- West: PHSI declined 1.3 percent in May to 98.6, 4.5 percent lower than the same time last year.
