After surging in May, the pace of homes under contract fell 1.9 percent in June — both year-over-year and month-over-month — according to the National Association of Realtors’ monthly index.
Lawrence Yun, NAR’s chief economist, described recent ups and downs in the pending sales index as indicative of a “turning point for the market.”
“Buyers are still interested and want to own a home, but record-high home prices are causing some to retreat,” he said in a statement. “The moderate slowdown in sales is largely due to the huge spike in home prices.”
Home prices broke records for the third consecutive month in May, according to the S&P CoreLogic Case-Shiller index.
By June, the median existing home price was $363,300, up 23 percent over last year and marking the 112 consecutive month of year-over-year price gains, according to NAR.
NAR’s pending home sales index is generally seen as a forward-looking indicator of the pace of existing sales in one or two months’ time, as home sales often take several weeks to close. The dip in June comes after pending home sales jumped 8 percent month-over-month and 13.1 percent year-over-year in May.
Yun said he expects sales activity in the Midwest to remain strong, as the region is the most affordable for buyers.
Pending home sales logged year-over-year gains in both the Midwest and Northeast in June, while contract activity in the South and West regions dropped.