The latest data from the U.S. real estate sector reveals that pending home sales have climbed significantly, surpassing analysts' expectations. According to the National Association of Realtors (NAR), the forward-looking indicator of home sales based on contract signings registered a noteworthy increase of 4.8% in June compared to the previous month.
This performance stands in contrast to the more conservative 1.4% rise anticipated in a Bloomberg survey. Although there was a slight annual decline of 2.6% in pending transactions, this was well below the forecasted drop of 7.4%, suggesting resilience in buyer interest amid changing market dynamics.
All four major regions of the U.S. experienced sequential gains in sales, with the South leading the charge with a robust 6.3% increase, followed closely by the Midwest, which saw a 4.7% rise. Interestingly, the West was the only region reporting an annual uptick in sales, showcasing a potential variance in regional housing market health.
NAR's Chief Economist, Lawrence Yun, commented on the contributing factors to this positive trend, stating, "The rise in housing inventory is beginning to lead to more contract signings. Multiple offers are less intense, and buyers are in a more favorable position." This reflects a shifting landscape where increased inventory is giving buyers greater leverage, thereby easing some of the competitive pressures previously seen in the market.
Additionally, the unsold inventory of existing homes—and a critical metric for market health—has risen to a 4.1-month supply at the current sales pace as reported last week by the NAR. This marks its highest level in over four years. Moreover, new home supply has also seen an uptick, reaching a supply level of 9.3 months at the sales rate noted for June, which is an increase of 2.2% from May, according to reports from the Census Bureau and the Department of Housing and Urban Development.
Looking ahead, Yun indicated that even more inventory is anticipated to enter the housing market in the coming months, as sellers prepare ahead of the traditional seasonal declines observed during winter. In terms of price dynamics, home price growth has shown signs of moderation. As reported by the S&P Global (SPGI) division S&P Dow Jones Indices, the rate of annual growth in U.S.
home prices slowed to 5.9% in May, down from 6.4% in April. The S&P CoreLogic Case-Shiller Index further revealed a monthly increase of 0.3% in May, which aligns with the prior month's performance. This stabilization in price growth may serve both buyers and sellers, offering a clearer picture of market conditions while allowing for strategic pricing in ongoing negotiations..