Don’t Be Fooled As Pending Home Sales Edge Higher
NAR sees a downward trend forming on pricing, transactions.
The Northeast helped the country break a six-month skid overall for pending home sales prices with a 15.4 percent spike in May, according to the National Association of Realtors.
Overall, prices rose by 0.7% compared to April, but NAR chief economist shrugs that off and suggests a downward trend.
“Despite the small gain in pending sales from the prior month, the housing market is clearly undergoing a transition,” Lawrence Yun said in prepared statements. “Contract signings are down sizably from a year ago because of much higher mortgage rates.”
Looking further back, compared to a year ago, the Northeast, South, and West posted double-digit pending sales declines, according to the Pending Home Sales Index (PHSI), sales dropped by 8.8% in the Midwest and year-over-year transactions fell 13.6%.
Comparable Homes See Mortgage Payments Up $800 Since January
The monthly mortgage payment has increased by about $800 since the beginning of the year for the median single-family home with a 10% down payment as mortgage rates have climbed by 2.5 percentage points since January.
“Trying to balance the housing market by choking off demand via higher mortgage rates is damaging to consumers and the economy,” Yun added. “The better way to balance the market is through increased supply, which also helps the broader economy.”