The market for existing single-family homes showed signs of revival in June as contracts for homes for sale increased 4.8% over the previous month across the United States.
Pending sales were also up in all four major U.S. regions. After a two-month decline in late spring nationally, the data reported by the National Association of Realtors Wednesday shows the impact of the increase in inventory of homes for sale.
“The rise in housing inventory is beginning to lead to more contract signings,” NAR Chief Economist Lawrence Yun said in a statement. “Multiple offers are less intense, and buyers are in a more favorable position. Even more inventory is expected to come onto the housing market in the upcoming months ahead of the normal, seasonal declines in the winter.”
The news on pending sales follows last week’s report that existing home sales fell 5.4% in June. Contracts to sell are considered a good indicator of sales closings in the near future, so this week's data could portend more positive news on existing homes next month.
The NAR’s pending sales index rose to 74.3 in June, up from 70.9 the previous month. The index is still down 2.6% from where it was one year ago. Contract signings increased month over month in June by 6.3% in the South, 4.7% in the Midwest, 3.4% in the West and 3% in the Northeast. The Northeast’s gain is attributable to that region’s ongoing housing shortage, Yun said in the NAR statement. With a 1% hike, the West was the only region to see an improvement over pending sales from a year earlier.
“It is a good time to list,” Yun said.
The inventory of homes for sale rose 23% in June from the same month in 2023 with four months of supply now available, a sign economists consider a normal housing market. Another positive direction is that the average 30-year fixed-rate mortgage has stayed below 7% since early May, though many prospective borrowers would like to see further declines.