Pending home sales in the U.S. rose by much less than expected in the month of June, the National Association of Realtors revealed in a report on Wednesday.
NAR said its pending home sales index edged up by 0.2 percent to 111.0 in June after tumbling by 3.7 percent to 110.8 in May. Economists had expected the index to jump by 1.3 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
"With only the Northeast region having an adequate supply of homes for sale, the reoccurring dilemma of strained supply causing a run-up in home prices continues to play out in several markets, leading to the last two months reflecting a slight, early summer cooldown after a very active spring," said NAR chief economist Lawrence Yun.
He added, "Unfortunately for prospective buyers trying to take advantage of exceptionally low mortgage rates, housing inventory at the end of last month was down almost 6 percent from a year ago, and home prices are showing little evidence of slowing to a healthier pace that more closely mirrors wage and income growth."
The modest uptick in pending home sales reflected a substantial increase in pending sales in the Northeast, which surged up by 3.2 percent.
Pending home sales in the Midwest also rose by 0.8 percent, while pending sales in the South fell by 0.6 percent and pending sales in the West tumbled by 1.3 percent.
NAR said supply and affordability constraints prevented a bigger boost in activity from mortgage rates that lingered near all-time lows through most of the month.
by RTT Staff Writer
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