July 31–The Northeast led the nation in homes listed for sale that went under contract in June, according to a Monday report, but remained behind the pace of a year ago as mortgage rates inched up to offset strengthening employment and stocks.
Pending home sales rose 1.4 percent in the Northeast, well above a 0.9 percent increase nationally that arrived after two straight months of declines as tracked by the National Association of Realtors. It typically takes two months for contracts to reach closing, with sales of U.S. homes in June having dropped 0.6 percent.
The National Association of Realtors bases its pending home sales index on a survey of about 20 percent of contract signings nationally, which remain down 2.5 percent on an annual basis. Heading into the second half of 2018, NAR predicts annual sales of existing homes — excluding newly built houses — will drop 1 percent this year to below 5.46 million, or about 50,000 fewer than in 2017.
“The closing activity has been sluggish so far in the first half of the year — down 2 percent year-to-date,” said Lawrence Yun, chief economist of NAR, in a video review of the Washington, D.C.-based trade group’s monthly report. “The pending contracts … are still down from one year ago, but at least compared to last month’s trend it is up, implying that there is still some stabilizing pattern in the marketplace.
“Conflicting signals — job growth is strong so housing demand should be rising, but at the same time the home buyers are facing affordability challenges,” Yun added. “But the latest increase is a very good leading indicator about the upcoming closings.”
In June, U.S. home inventories rose for the first time in three years on an annual basis. While it was only a slight uptick, several metropolitan areas nationally saw big spikes in homes hitting the market, including Providence, R.I. where inventory was up 20 percent, behind only Portland, Ore.
NAR projects an 8.6 percent increase in sales of new homes this year followed by another 11.1 percent bump in 2019, with new construction nationally now at a 10-year high.
“Whatever the home builders build, they are able to sell,” Yun said.
This article provided by NewsEdge.