Ongoing inventory shortages are propelling home prices higher, causing pending home sales to slump for the third consecutive month, the National Association of REALTORS\u00ae reported Wednesday. None of the major regions of the U.S. saw an increase in contract activity in May.<\/p>\n
NAR\u2019s Pending Home Sales Index, a forward-looking indicator based on contract signings, dropped 0.8 percent to a reading of 108.5 in May. The index is 1.7 percent below a year ago.\u00a0<\/p>\n
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\u201cMonthly closings have recently been oscillating back and forth, but this third consecutive decline in contract activity implies a possible topping off in sales,\u201d says Lawrence Yun, NAR\u2019s chief economist. \u201cBuyer interest is solid, but there is just not enough supply to satisfy demand. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast.\u201d<\/p>\n
The lower price ranges of the housing<\/a> market are seeing the most persistent housing shortages, Yun says. Sales of homes under $100,000 last month plunged 7.2 percent year-over-year. Sales are up only 2 percent for homes priced between $100,000 and $250,000.<\/p>\n \u201cThe lack of listings<\/a> in the affordable price range are creating lopsided conditions in many areas where investors and repeat buyers with larger down payments are making up a bulk of the sales activity,\u201d Yun says. \u201cMeanwhile, many prospective first-time buyers can\u2019t catch a break. Prices are going up and there\u2019s intense competition for the homes they\u2019re financially able to purchase. \u2026 A much higher share of homeowners compared to a year ago think now is a good time to sell, but until they do, sales will likely stay flat and low inventory will keep price growth moving swiftly.\u201d<\/p>\n Source: National Association of REALTORS\u00ae<\/em><\/p>\n<\/div>\n<\/div>\n [ad_2]
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