Pending home sales decreased 0.8% in June compared with May and were down 2.8% compared with June 2024, according to the National Association of Realtors (NAR).
Month-over-month and year-over-year pending sales declined in the Midwest, South and West.
In the Northeast, pending sales increased month-over-month but remained flat year-over-year.
NAR’s Realtors Confidence Index shows a 4% and 6% year-over-year increase in homebuyer and seller traffic, respectively.
“The data shows a continuation of small declines in contract signings despite inventory in the market increasing,” says Lawrence Yun, chief economist for NAR, in a statement. “Pending sales in the Northeast increased incrementally even though home price growth in the region has been the strongest in the country.”
“The Realtors Confidence Index shows early indications of potential contract signings increasing moving forward,” Yun adds. “Realtors are optimistic that homebuying and selling activity will increase. That confidence is supported by the fact that mortgage applications have been rising.”
In a statement, Victor Kuznetsov, managing director and co-founder of Imperial Fund, says there are two factors stalling pending home sales.
“The first is that the Federal Reserve is keeping interest rates flat to combat inflation, and the second is the general reluctance of the American people to make a significant purchase in this environment of market volatility,” Kuznetsov says. “Once the Fed begins to lower rates, which may not occur in September due to recent reports of an economic rebound in GDP, supporting the notion that the economy is on solid financial ground overall, then families will slowly begin to return to the housing market. The great news is that inventory is growing, so in this case, there will be plenty of homes to buy.”
Photo: Gabrielle Henderson