Pending home sales slid for the fourth time in five months across the country in July as “staggering inventory woes” continue to keep a lid on what’s available in the resale market, according to a report out today from the National Association of Realtors.
The Pending Home Sales Index is a forward-looking indicator of sales figures, based on signed contracts yet to be closed. The index was down 0.8 percent in July to 109.1 and is 1.3 percent below a year ago. The index rose only in the western states, where it still remains 4.0 percent below a year ago.
“With the exception of a minimal gain in the West, pending sales were weaker in most areas in July as house hunters saw limited options for sale and highly competitive market conditions,” said Lawrence Yun, NAR chief economist. “The housing market remains stuck in a holding pattern with little signs of breaking through. The pace of new listings is not catching up with what’s being sold at an astonishingly fast pace.”
The median home prices has risen 38 percent in the past five years, Yun said, adding that hourly wages have increased just 12 percent during that time. He called the trend “unsustainable,” as it puts pressure on affordability.
Still, demand is strong as supplies stay tight.
“Buyer traffic continues to be higher than a year ago, the typical listing has gone under contract within a month since April, and inventory at the end of July was 9.0 percent lower than last July,” said Yun. “The reality, therefore, is that sales in coming months will not break out unless supply miraculously improves. This seems unlikely given the inadequate pace of housing starts in recent months and the lack of interest from real estate investors looking to sell.”
NAR reports have for months indicated tight supplies in what has been characterized as a “severe housing shortage.”