The numbers: U.S. pending home sales rose 0.9% in June, the National Association of Realtors said Monday.
What happened: NAR’s index, which tracks real-estate transactions in which a contract has been signed but the transaction hasn’t yet closed, rose to a level of 106.9 in June, but was lower than year-ago levels for the sixth month in a row, this time by 2.5%.
Economists had forecast a 0.8% increase for the month.
Big picture: The housing market increasingly appears to be running on fumes as demand continues to overwhelm supply. Sales of previously-owned homes tumbled to a 5-month low in June, the Realtors said earlier this month. Still, June marked the first inventory increase in three years, and that may have helped pending-home sales.
In June, pending-home sales in the Northeast jumped 1.4%, and in the Midwest were up 0.5%. In the South, they rose 1.1%, and sales in the West gained 0.7%. Sales in all four regions are lower than a year ago.
Also read: Homeownership rate jumps to 4-year high as more Americans make gains
What they’re saying: International purchases of U.S. real estate slid 21% from April 2017 to March 2018, NAR said last week. Foreign buyers and recent immigrants accounted for 8% of all transactions in that period, down from 10% in the 12-month period ending in March 2017. Real estate agents are uncertain about whether that decline is temporary, or will persist. NAR attributes that uncertainty “to confusion and ambiguity surrounding policy changes related to international trade and immigration.”
The group expects a 1% decline in overall existing-home sales in 2018 compared to last year, while the median existing-home price is forecast to rise by 5%.
Contract signings precede sales closings by approximately 45 to 60 days, but some economists have pointed out that the pending-home sales data, which are supposed to forecast existing-home sales, have instead diverged.
Also read: Americans are still shunning adjustable-rate mortgages 10 years after the crisis
Market reaction: This year, the SPDR S&P Homebuilders ETF XHB, +0.56% has dropped about 11% on concerns over the housing market.
