Pending home sales for existing homes fell 1.9% in June from May as homebuyers continue to pull back amid escalating home prices. These pending sales represent closed sales in one to two months. CNBC reports existing home sales were also down 1.9% compared to June 2020 levels and prices were up 17% year over year in May, marking the largest annual gain on record. Home prices continue to increase due to low inventory, says CNBC, but relief is on its way: The number of newly listed homes in June increased 5.5% compared to June 2020.
“With prices at record highs and mortgage rates still hovering near record lows, sellers are recognizing the favorable conditions,” said George Ratiu, senior economist at Realtor.com.
Regionally, pending sales increased 0.5% in June compared with May and were up 8.7% from a year ago. In the Midwest, sales rose 0.6% monthly but fell 2.4% annually.
In the South, pending sales fell 3% monthly and 4.7% from June 2020. In the West sales decreased 3.8% monthly and 2.6% annually.
Mortgage rates moved slightly higher at the start of June, which only added to affordability issues. Rates then came down again by the end of the month. Yun is predicting mortgage rates will rise more steadily toward the end of the year.
“This rise will soften demand and cool price appreciation,” he added.