Pending home sales slip, but conditions expected to improve
Posted on Tuesday, July 29, 2014 at 7:41:55 AM
The past few months have seen relatively strong numbers from the U.S. housing market, with rising inventory, dipping residential financing rates and increasing home sales. However, a recent report from the National Association of Realtors indicated a slight reversal of that good fortune, but even so, conditions are expected to remain positive for the remainder of 2014.
According to NAR, the Pending Home Sales Index, a statistic based off of contract signings, decreased 1.1 percent from May to June. It is also 7.3 percent lower than year-ago levels. This drop in sales is likely due to a short supply of properties, low wages and constricted credit conditions, NAR chief economist Lawrence Yun explained, but sales are still expected to increase over the next few months.
"The good news is that price appreciation has decreased to its slowest pace since March  behind much needed increases in inventory," he said. "With rents rising 4 percent annually, potential buyers are less likely to experience sticker shock and can make smart decisions on whether or not it makes sense to buy or continue renting."
In addition, Redfin supported Yun's assessment that positive conditions will continue in 2014. The future remains bright thanks to homebuyer demand, moderate price growth and a slight uptick in inventory. All of these trends make it easier to buy and sell real estate.