Despite the first year-over-year reduction in almost two years, pending U.S. home sales still came in at the second-highest level during the past 12 months.
As of May, the Pending Home Sales Index — which is a
forward-looking indicator of pending home sales that reflects contract signings — was 110.8.
Although the index, which is adjusted for seasonal variations, fell 4 percent from the prior month, it was still at the second-highest level during the last 12 months.
The National Association of Realtors reported the index based on a national sample of around a fifth of existing home-sales transactions.
The inventory of pending home sales was off less than a percent from May 2015. It was the first year-over-year decline in nearly two years.
“With demand holding firm this spring and homes selling even faster than a year ago, the notable increase in closings in recent months took a dent out of what was available for sale in May and ultimately dragged down contract activity,” NAR Chief Economist Lawrence Yun stated in an accompanying announcement. “Realtors are acknowledging with increasing frequency lately that buyers continue to be frustrated by the tense competition and lack of affordable homes for sale in their market.”
The biggest decline in pending home sales occurred in the Northeast, where the index dropped more than 5 percent to 93.0.
A more than 4 percent retreat in the Midwest left that index at 108.0, while a more than 3 percent reduction left the index in the South at 126.6 and the index in the West at 102.6.
Yun noted that “prolonged market angst and further economic uncertainty” from last week’s vote by British citizens to exit from the European Union “could negatively impact our economy and end up tempering the overall appetite for homebuying.”
