Activity increased for the month of June as pending home sales improved 4.8%, according to the National Association of Realtors (NAR).
All four U.S. regions posted monthly gains in transactions. Year-over-year, the Northeast, Midwest, and South registered declines, while the West increased.
“The rise in housing inventory is beginning to lead to more contract signings,” says NAR chief economist Lawrence Yun. “Multiple offers are less intense, and buyers are in a more favorable position.”
The Pending Home Sales Index (PHSI)–a forward-looking indicator of home sales based on contract signings–grew to 74.3 in June. Year over year, pending transactions were down 2.6%. An index of 100 is equal to the level of contract activity in 2001.
“Pending home sales have pulled back from May’s all-time low. While transactions remain down year-over-year, at least we saw a decent month-over-month bump. As an added plus, the gains were spread across the entire country. Increased inventory should help the housing market sustain this improvement, but only if enough homes for sale are within buyers’ budgets,” says Kate Wood, home and mortgage expert at NerdWallet.
The Northeast PHSI rose 3.0% from last month to 65.5, a decrease of 0.3% from June 2023. The Midwest index increased 4.7% to 73.7 in June, down 4.2% from one year ago.
The South PHSI jumped 6.3% to 89.3 in June, dropping 3.9% from the prior year. The West index ascended 3.4% in June to 58.4, up 1.0% from June 2023.
“Even more inventory is expected to come onto the housing market in the upcoming months ahead of the normal, seasonal declines in the winter,” says Yun. “The Northeast’s small gain in contract signings is due to the ongoing housing shortage situation in that region, leading to stronger home price gains. It is a good time to list.”
