Pending home sales in June were down slightly on an annual basis with a larger month-over-month decline as a difficult economic environment keeps many would-be buyers on the sidelines, the National Association of REALTORS® said in its Pending Home Sales report.
“The highest mortgage rates in nearly a year and the record-high national median home price together are contributing to a tepid housing market that is especially difficult for first-time homebuyers,” said NAR Chief Economist Lawrence Yun. “However, job gains can help support housing demand.”
Regional pending home sales
The annual and monthly declines of 0.3% and 5.4%, respectively, do not fully capture the geographic variability of market performance.
The Northeast had the strongest year-over-year increase of 2.2%, followed by the Midwest, which saw a slight annual rise of 0.3%. The South had an annual 0.9% decrease, and the West had a 1.1% decrease year over year.
All regions were down month over month, led by the Midwest (8.9%), West (4.7%), South (4.1%) and Northeast (3%).
“It is worth emphasizing that it is closing activity, not contract signings, that generates economic impact,” Yun said. “Pending contracts are only suggestive of upcoming closed deals and do not align perfectly, due to fallout rates and contract contingencies.”
Strong growth in many cities
At the local level, several markets posted robust year-over-year increases in pending home sales. Among the 50 largest metro areas, the following 10 markets posted the biggest annual increases in pending home sales, according to data from Realtor.com Economics:
- Virginia Beach-Chesapeake-Norfolk, Virginia/North Carolina (+15.4%)
- Sacramento-Roseville-Folsom, California (+15.2%)
- Kansas City, Missouri/Kansas (+14.4%)
- Richmond, Virginia (+14.0%)
- Buffalo-Cheektowaga, New York (+12.1%)
- Austin-Round Rock-San Marcos, Texas (+11.1%)
- San Francisco-Oakland-Fremont, California (+10.7%)
- Los Angeles-Long Beach-Anaheim, California (+9.6%)
- Miami-Fort Lauderdale-West Palm Beach, Florida (+9.5%)
- St. Louis, MO-IL (+9.1%)
“The bigger picture is a housing market recovery that remains intact but is still waiting for a catalyst,” said First American Senior Economist Sam Williamson. “The structural supports are in place, an easing lock-in effect, a resilient labor market and favorable demographics, but none is strong enough on its own to draw sidelined buyers back while financing costs hover near a one-year high. Until rates ease enough to move the affordability math, the recovery is likely to keep progressing at a measured pace.”