Friday, August 31, 2018

Let's Talk... Hot Off The Press

Pending home sales have dropped for 

seven straight months

NAR says that sales are slowing because of high pricing
By Dennis Lynch | August 29, 2018 02:00PM

A house for sale and National Association of 
Realtors Chief Economist Lawrence Yun 
(Credit: Pixabay)
Pending sales for existing homes nationwide dropped by 0.7 percent in between July 
and June, and have now fallen for seven straight months on an annual basis.
The National Association of Realtors’ study of those sales suggests that the slowdown
 is because of high pricing. Pending sales in July were down 2.3 percent year over year. 
The organization’s analysis is based on contracts signed for existing single-family 
homes, condos and co-ops, also making it an indicator of what closed sales could 
look like in a month or two.
The western U.S. saw the biggest year-over-year dip in pending sales, dropping 
by 5.8 percent. Sales in the southern U.S., which has been one of the stronger 
egions in recent years, dipped by 0.9 percent.
NAR Chief Economist Lawrence Yun said those declines “weighed down” the 
overall national numbers. He said the latest numbers are a reflection of overheated 
markets, pointing to the western U.S. as the prime example.
Years of inadequate supply and strong job growth “have finally driven up home prices 
to a point where an increasing number of prospective buyers are unable to afford it,” Yun said.
The latest S&P CoreLogic Case-Shiller Index suggested that pricing may 
be hitting a ceiling in many major U.S. metros. Home prices in 20 cities part of 
the index rose at their slowest pace since 2016. Climbing mortgage rates are also 
likely affecting the pace of price growth and sales.
Yun added that if new home construction picked up, prices would likely come 
down to a point that first-time buyers could afford again. First-time buyers spent 
around 23 percent of their income on a typical starter home in the second quarter, up 2
 percent from the first quarter.
He predicted sales of existing homes this year would drop by 1 percent to 5.46 
million and pricing would increase by around 5 percent.Tags: home priceshome sales

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