The National Association of Realtors (NAR) is reporting that pending home sales increased in June 2017 which is bucks a three month trend of decreased contract activity from the same time a year ago. NAR used a pending home sales index which rose 1.5 percent in June to 110.2. The index has increased 0.5 percent over the past 12 months and for the first time since March. All major regions saw an increase of activity except the Midwest according to the report.
Lawrence Yun, chief economist for the NAR believes that low supply is hampering an increase in activity although the nation has 2.2 million net new jobs. He states “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. 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.” There were 1.96 million homes for sale in June, a 7.1 percent decline from a year ago.
Of particular interest here in the Northeast, the pending home sales index indicates a 0.7% increase in activity from the previous month and 2.9% increase year to year. The NAR considers Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont as comprising the Northeast.
Yun expects existing-home sales to finish around 5.56 million, which is an increase of 2.6 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 5 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent according the the report. The median sales price is currently at $263,800 an increase of 6.5% year over year.
The Pending Home Sales Index is an idex devised by the National Association of Realtors for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed. The index is based on a national sample, typically representing about 20 percent of transactions for existing-home sales.