June pending-home sales ticked 0.3% higher compared to May, the first increase since February, the National Association of REALTORS® reported, citing its Pending Home Sales Index.
Pending sales, in which the contract has been signed but the transaction has not closed, are considered a leading indicator and generally precede existing-home sales by a month or two. Meanwhile, sales were down 15.6% year over year.
“The recovery has not taken place, but the housing recession is over,” NAR Chief Economist Lawrence Yun said in a press release. “The presence of multiple offers implies that housing demand is not being satisfied due to lack of supply. Homebuilders are ramping up production and hiring workers.”
NAR expects existing-home sales to fall 12.9% from 2022 to 2023, settling at 4.38 million, before climbing 15.5% to 5.06 million in 2024. Compared to last year, the national median existing-home price is expected to decline 0.4% to $384,900 this year and rise 2.6% next year to $395,000. The association expects housing starts to drop 5.3% to 1.47 million this year before increasing 5.4% to 1.55 million in 2024.
“It is critical to expand supply as much as possible to widen access to homebuying for more Americans,” Yun said. “Home prices will be influenced by how much inventory is brought to market. Increased homebuilding will tame price growth, while limited construction will lead to home-price appreciation outpacing income growth.”
NAR expects the 30-year fixed mortgage rate to hit 6.4% this year and fall back to 6% in 2024.
“With consumer price inflation calming close to the Federal Reserve’s desired conditions, mortgage rates look to have topped out,” Yun said. “Given the ongoing job additions, any meaningful decline in mortgage rates could lead to a rush of buyers later in the year and into the next.”