Dive Brief:
- Pending home sales rose a slight 0.2% in June to a rate of 111.0, up from the 110.8 level in May, the National Association of Realtors reported Wednesday.
- June's rate was 1.0% higher than June 2015. The Pending Home Sales Index reached its second-highest mark over the past year, but it is still struggling to climb back to its 2016 high of 115.0, which it reached in April.
- Pending sales increased 3.2% in the Northeast and 0.8% in the Midwest, while sales fell 0.6% in the South and 1.3% in the West.
Dive Insight:
June pending home sales came in well below expectations, as economists surveyed by MarketWatch forecast a strong 1.3% gain last month.
NAR Chief Economist Lawrence Yun once again attributed the lack of stronger growth in residential sales to tight available inventory on the market. He said the Northeast saw the highest sales jump due to the fact that it was the only U.S. region with "an adequate supply of homes for sale."
Yun added in a release, "Until inventory conditions markedly improve, far too many prospective buyers are likely to run into situations of either being priced out of the market or outbid on the very few properties available for sale." The lack of inventory continues to be the housing market's defining story this year, as builders focus their efforts on luxury buyers amid rising regulatory costs.
After a somewhat shaky May for the housing market, residential reports this month have been mostly positive. Builder confidence slipped just one point to a score of 59, housing starts increased 4.8% in June, existing home sales rose 1.1%, and new home sales surged 3.5% to an eight-year high.
