Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Economic News

Pending home sales dip, mortgage rates continue to fall

NAR points to closing delays and paperwork problems at banks for the uneven performance in sales closings, which they say is likely to continue.

Pending home sales dip

According to the National Association of Realtors (NAR), pending home sales (contract signings) fell 1.4 percent in June, but rose 9.5 percent compared to June 2011. June marks the 14th consecutive month of year-over-year gains, says NAR.

Dr. Lawrence Yun, NAR chief economist, said that inventory shortages are a factor. “Buyer interest remains strong but fewer home listings mean fewer contract signing opportunities. We’ve been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors.”

According to the Realtors® Confidence Index, the buyer traffic index stood at 60 in June while the seller index was 41, which shows a large imbalance between buyer and seller interest. NAR reports that a value of 50 implies neutral market conditions; the disparity between buyers and sellers began to grow in early spring and has been in a particularly large imbalance for the past two months.

“Any bank-owned properties that have been held back in markets with inventory shortages should be released expeditiously to help meet market demand,” Dr. Yun said. “Housing starts will likely need to double over the next two years to satisfy the pent-up demand for both rentals and ownership.”

Advertisement. Scroll to continue reading.

NAR PHSI

Pending home sales’ regional performance

In the Northeast, pending home sales fell 7.6 percent, remaining 12.2 percent above June 2011, while the Midwest fell 0.4 percent for the month, but is up 17.3 percent for the year. In the South, pending home sales dropped 2.0 percent, and is up 8.8 percent from June 2011.

Pending home sales actually rose 2.6 percent in the West for the month, and the index is 3.0 percent higher than June 2011.

According to the Freddie Mac Primary Mortgage Market Survey (PMMS) data released Thursday morning, rates are continuing their trend of dropping. The average rate on a 30-year fixed rate mortgage fell from 3.53 percent last week to 3.49 this week, while 15-year fixed rate mortgages dropped from 2.83 percent to 2.80 percent.

“With record low mortgage interest rates, there has been a surge of refinancing on top of a higher level of home purchases, which has been creating delays recently in the closing process,” Dr. Yun said.

“In addition, there have been some delays with recent foreclosure sales as banks take steps to ensure there are no paperwork problems,” Dr. Yun continued. “This is causing an uneven performance in sales closings, which is likely to continue, but we also see notably higher levels of sales activity compared with a relatively flat performance in the preceding four years.”

Advertisement. Scroll to continue reading.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

2 Comments

2 Comments

  1. Joe Loomer

    July 27, 2012 at 8:00 am

    I think your title should have been something about Pending Home Sales up almost 10% over June 2011!!  Month-to-month stats can be relevant, but comparing to the previous year’s number (or several years – same month) is far more indicative of actual behavior.  

  2. TerryFriedman

    July 27, 2012 at 9:29 pm

    RAISE INTEREST RATES AND THE ECONOMY WILL SOAR….LOW RATES AND A DEVALUED DOLLAR KEEP PEOPLE DOWN AND BUSINESS DOWN. THERE IS NO INCENTIVE TO BUY HOUSES NOW WHEN WE HEAR THAT RATES WILL REMAIN LOW FOR THE NEXT SEVERAL YEARS?….

Leave a Reply

Your email address will not be published.

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Real Estate Technology

(TECH NEWS) It turns out that Internet of Things, like smart bulbs in homes, are not secure and give up your info - here...

Real Estate Marketing

(MARKETING) Your fancy, self-animating website might be making people violently ill, even if it is insanely beautiful. Sorry...

Real Estate Marketing

(MARKETING) Conduit is a CRM that does more than CRM, it analyzes your networking data to help you see how to improve your relationships.

Real Estate Corporate

(REAL ESTATE) Zillow has long been a data powerhouse, but a lawsuit about a $150M listing offers a look into listings claims.

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.