An ongoing inadequate supply of residential properties for sale has pushed prospective homebuyers to a tipping point and driven down year-over-year listings seven months in a row.
A
forward-looking indicator based on single-family contract signings, the Pending Home Sales Index, was calculated to be a seasonally adjusted 106.2 as of July. The reading is preliminary.
Pending home sales retreated from the upwardly revised level for the previous month by 0.7 percent. A 2.3 percent decline was recorded versus the downwardly revised level for a year previous.
It was the seventh consecutive year-over-year decline for the index, according to
the National Association of Realtors, which announced last month’s index Wednesday.
NAR’s chief economist, Lawrence Yun, explained in a written statement, “The reason sales are falling off last year’s pace is that multiple years of inadequate supply in markets with strong job growth have finally driven up home prices to a point where an increasing number of prospective buyers are unable to afford it.”
The index in the South was 122.1, declining from June by 1.7 percent — the most of any region. The West’s index dipped 0.9 percent to 94.7.
“It’s evident in recent months that many of the most overheated real estate markets — especially those out West — are starting to see a slight decline in home sales and slower price growth,” Yun said.
But in the Midwest, pending home sales inched up 0.3 percent, leaving the index at 102.2. A 1.0 percent rise in the Northeast left the index there at 94.6.
