Pending home sales (data based upon contracts signed in June) continues to drop but the nosedive seems to be slowing down drastically. After a dramatic drop of 30% in May, the pending home sales decline of 2.6% in June as reported today by the National Association of Realtors seems like a welcome drop.
Down 18.6% from June of 2009, the pending home sales numbers have been altered over the year by the home buyer tax credit frenzy.
Lawrence Yun, NAR chief economist, said lower home sales are expected in the short term. “There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” he said. “Over the short term, inventory will look high relative to home sales. However, since home prices have come down to fundamentally justifiable levels, there isn’t likely to be any meaningful change to national home values. Some local markets continue to show strengthening prices.”
Yun expects mortgage interest rates to remain historically low for the balance of the year, with very modest growth in employment. “We really need to see stronger job creation to have a meaningful recovery in the housing markets,” he added.
- The Northeast dropped 12.2% in June, down 25.4% from June 2009
- The Midwest dropped 9.5% in June, down 27.8% from June 2009
- The South rose 3.7% in June, but is still 13.3% below June 2009
- The West dropped 0.2% in June, down 14.2% from June 2009