That National Association of Realtors (NAR) is reporting the pending home sales declined nationally in July 2019 by 2.5% nationally. Pending home sales have changed course after seeing two consecutive months on increasing pending home sales. The increase of the previous months were the first seen since the last 19 months prior as we recently reported.
NAR’s Pending home sales index, which provides an index based on contract signings decreased 2.5% to 105.6 in July, down from 108.3 in June. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
Lawrence Yun, chief economist for the NAR believes that economic uncertainty and low inventory is affecting sales. He states “Economic uncertainty is no doubt holding back some potential demand, but what is desperately needed is more supply of moderately priced homes.” He further explains that new construction at moderate prices is essential. “A boost to home building would greatly improve economic growth. More free-market prices on construction materials without government interference about where homebuilders have to get their supply will also help produce more and grow the economy. The housing industry cannot grow without more supply.”
Looking into the future Yun predicts sales will get a short term boost from lower mortgage rates however existing-home sales will most likely remain flat at 5.34 million for the rest of 2019. His prediction is based on the level of sales in the first seven months of the year. The report indicates that with low inventory median prices for existing homes will increase by 4% to $269,000, and 3% in 2020, to $278,500.
All regions are down according to the index. Of significance to the New York City region we see that pending home sales are down 1.6% in the Northeast to 93.0 in July and is now 0.9% lower than a year ago. The West region saw the most significant drop at 3.4% followed by the Midwest at 2.5% and South region at 2.4%.
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