NAR: June Pending Home Sales Fell 8.6%

Year-to-year, pending sales were down 20%. NAR says that over three years (June 2019 to June 2022) home prices rose 80%, and it now predicts a 13% decline in 2022.

WASHINGTON – After a slight May increase, pending home sales decreased in June, according to the National Association of Realtors® (NAR). All four major regions included in NAR’s study posted month-over-month and year-over-year pullbacks, with the West seeing the largest decline.

The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – dipped 8.6% to 91.0 in June. Year-over-year, transactions shrank 20.0%.

“Contract signings to buy a home will keep tumbling down as long as mortgage rates keep climbing, as has happened this year to date,” says NAR Chief Economist Lawrence Yun. “There are indications that mortgage rates may be topping, or very close to, a cyclical high in July. If so, pending contracts should also begin to stabilize.”

According to NAR, a home purchased in June was about 80% more expensive than one bought three years earlier, in June 2019, and almost a quarter of June 2019 buyers would be unable to do so today because they no longer have the qualifying income for a median-priced home.

“Home sales will be down by 13% in 2022, according to our latest projection,” Yun adds. “With mortgage rates expected to stabilize near 6% and steady job creation, home sales should start to rise by early 2023.”

June pending home sales regional breakdown: The Northeast PHSI slid 6.7% compared to last month to 80.9, down 17.6% from June 2021. The Midwest index dropped 3.8% to 93.7 in June, a 13.4% decline from a year ago.

An index of 100 is equal to the level of contract activity in 2001.

The South PHSI slipped 8.9% to 108.3 in June, a decrease of 19.2% from the previous year. The West index slumped 15.9% in June to 68.7, down 30.9% from June 2021.

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