Pending home sales inched back 0.5 percent in May, falling on an annualized basis for the fifth straight month, according to NAR. A decline in contract activity in the South offset gains in the Northeast, Midwest and West.
Lawrence Yun, NAR chief economist, says this year’s spring buying season did not meet market expectations. “Pending home sales underperformed once again in May, declining for the second straight month and coming in at the second lowest level over the past year,” he said. “Realtors® in most of the country continue to describe their markets as highly competitive and fast moving, but without enough new and existing inventory for sale, activity has essentially stalled.”
Supply issues continue to be the story and home price gains are still outpacing income growth, and listings typically went under contract in just over three weeks. Yun believes that the summer months will be a true test for the housing market, and that the recent increase in new home construction to a 10-year high is an encouraging sign.
“Several would-be buyers this spring were kept out of the market because of supply and affordability constraints. The healthy economy and job market should keep many of them actively looking to buy, and any rise in inventory would certainly help them find a home.”
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