Pending US home sales cooled in May: report

Contracts on resales dipped 3.7% nationwide

Jun.June 29, 2016 03:00 PM

From the New York website: Pending home sales in the U.S. saw a slight dip in the month of May compared to the same period in 2015, the first year-over-year decline recorded in almost two years.

After a steady climb for three straight months, the pending home sales index slid 3.7 percent from April to May to 110.8, according to a report issued by the National Association of Realtors on Wednesday. That’s 2.6 percentage points higher than forecasted. The number of pending resales reflects a 0.2 percent decrease from May of 2015.

The NAR considers 100 to be a healthy figure on the index. The index hasn’t dropped year-over-year since August 2014, according to the NAR.

Despite the slowdown in May, overall projections for 2016 remain positive. NAR forecasts that 5.44 million previously owned homes will be sold this year, 3.7 percent more than last year.

The cooling in May can be attributed to the increase in closings in the spring due to high demand and the high pace of sales, NAR chief economist Lawrence Yun said in a statement. Because of heightened activity in previous months, inventory fell and dragged down the number of contracts in May, he said.

“Total housing inventory at the end of each month has remarkably decreased year-over-year now for an entire year,” said Yun. “There are simply not enough homes coming onto the market to catch up with demand and to keep prices more in line with inflation and wage growth.”

The drop in pending sales from April to May was highest in the Northeast, with a 5.3 percent drop. The Midwest slipped by 4.2 percent, the West Coast by 3.4 percent and the South by 3.1 percent.

The Brexit may be a source, both positive and negative, of market volatility, according to Yun. Britain’s exit from the European Union could lead to even lower mortgage rates and increased demand from foreign buyers, but could also dampen the overall demand for home buying, he said. [NAR] — Cathaleen Chen

Related Articles

Home bidding wars cool a bit nationwide (Credit: iStock)

Fewer LA buyers willing to pay above ask these days

The median sales price inched up less than one percent last quarter to $1.51 million from $1.5 million a year prior (Credit: iStock)

In wealthy Los Angeles, home sales are up. But prices aren’t

Ryan Davis and Ben Bacal with Stanley Mosk Courthouse (Credit: Facebook, Compass, Wikipedia)

An escalation in the 7-year-old Bacal/Davis commission dispute

A 24,000-square-foot home in Beverly Hills Post Office

Luxury market rebounds in some LA submarkets, while median home sales hit record

Los Angeles homes (Credit: iStock)

SoCal home-buying saw most active July in 4 years amid falling mortgage rates

Scott Laurie, chief executive of Olson Co. and Christopher Thornberg, founding partner of Beacon Economics

How slow can you go? Statewide homebuilders tap brakes on new projects amid rising costs

CoreLogic's Andrew LePage and Orange County (Credit: Wikipedia)

SoCal housing market shows signs of life, with a caveat: report

Andy Reid, the President of MetroStudy

The great SoCal slowdown: Homebuilding drops 18%