According to the National Association of Realtors, in a statement made on Monday, the Pending Home Sales Index improved about 1.5 percent on stronger contracts signed just last month. The reading is now reading of 110.2; more importantly, the growth is about double the same metric from last month.
Typically, pending home contracts move into sales within the next 30 to 60 days. Last month’s surge implied that existing home sales should pick up after a drop of 1.8 percent in June. Fortunately, the housing market has seen a bump in the face of fewer properties, which has helped to push up prices.
NAR chief economist Lawrence Yun comments, “The first half of 2017 ended with a nearly identical number of contract signings as one year ago, even as the economy added 2.2 million net new jobs. Market conditions in many areas continue to be fast-paced, with few properties to choose from, which is forcing buyers to act almost immediately on an available home that fits their criteria.”
Yun also goes on to say that the rebound in pending sales—through most of the country, in June—is quite a welcome sign. He adds, “Low supply is an ongoing issue holding back activity. Housing inventory declined last month and is a staggering 7.1 percent lower than a year ago.”
Now, Yun does not go into any detail over hopes for the next few months, at least in terms of first-time buyers. First-time home buyers are struggling, right now, finding available homes in a comfortable price range. On the other hand, sales of homes to investors, last month, hit the lowest marks of the year—at 13 percent—which helped to push up cash transactions—to 18 percent—which is the smallest share since June of 2009.
Yun continues, “It appears the ongoing run-up in price growth in many areas and less homes for sale at bargain prices are forcing some investors to step away from the market. Fewer investors paying in cash is good news as it could mean a little less competition for the homes first-time buyers can afford. However, the home search will still likely be a strenuous undertaking in coming months because supply shortages in most areas are most severe at the lower end of the market.”
As we head into the second half of 2017, Yun says he expects that existing home sales should register around 5.56 million. That is an impressive jump of about 2.6 percent from 2016, when the tally was 5.45 million. Also, the national median exisint-home price, this year, is expected to jump by about 5 percent.