Pending Home Sales Index Inches Up in May

Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • National Association of Realtors’ May Pending Home Sales Index (PHSI) ROSE 1.1 percent from April to 105.4;
  • Year-year the index was DOWN 0.5 percent.

Trends:

  • The Index remained over 100 for the fifth time this year;
  • Index is down year-year for 17 straight months.

Data Source: National Association of Realtors (NAR)

Image result for pending home sales

Pushing past concerns about rising home prices – and relying more on falling interest rates — the National Association of Realtors’ pending home sales index rose in May after slipping in April.

Still the index — which tracks contracts for sale – remained below year-earlier levels and suggests the home sales market still has hurdles to overcome.

Existing home sales rose 2.5 percent in May even though contracts for sales shot up 3.9 percent two months earlier.

Freddie Mac, meanwhile Thursday, reported the average rate for a 30-year fixed rate mortgage dropped to 3.73 percent from 3.83 percent one week earlier, the lowest rates for a 30-year loan since November 2016.

The Census Bureau and Department of Housing and Urban Development reported earlier this week contracts for the sale of new homes fell 7.8 percent in May.

The lower interest rates should bring more existing homes to market tempting empty-nesters who had been on the sidelines and thus increasing the inventory of “used” homes for sale. The inventory of new homes for sale edged up in May to an annualized rate of 333,000 from 332,000 in April. Realtors have attributed the stagnant market for existing homes to limited inventory.

Still, sellers could be disappointed if buyers are turned away due to an increase in home prices. Case Shiller CoreLogic reported this week its national home price index showed prices continuing to rise, up 0.93 percent in April, the sharpest month-month increase in a year.

Hear Mark Lieberman every Friday at 6:20 am on POTUS Morning Briefing, Sirius-XM 124. You can follow Mark Lieberman on Twitter at @foxeconomics.

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