The National Association of Realtors (NAR) Monday morning released its data on pending sales of existing homes in June. The pending home sales index slipped 1.1% from an index reading of 103.8 in May to the June reading of 102.7. That is 7.3% lower than in June 2013, when the index reading was 110.8. The consensus estimate called for a month-over-month increase of 0.3% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.
June marks the first decline after three months of increases in pending home sales. The index rose 6.1% in May.
NAR roughly maintained its estimate for total existing home sales in 2014 to be 2.8% below the 2013 total of 5.1 million at a total of 4.95 million. National median home prices are forecast to rise by about 5% to 6% both this year and next.
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The NAR's chief economist noted:
Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved. However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates.
Pending home sales in the Northeast U.S. decreased 2.9% in June, posting an index reading of 83.8, down 3.2% from June 2013. The index rose 1% in the Midwest but remains 5.5% below last year's reading. Sales dropped 2.4% in the South and slipped by 0.2% in the West. Compared with June 2013, sales are down in all regions.