Pending home sales drop in June

Pending sales on existing homes fell by nearly 2 percent in June from May, indicating a possible drop in closed sales in the upcoming months.

As CNBC reports, new data from the National Association of Realtors found that not only had pending sales from May to June dropped, but sales were also down by 1.9 percent when compared to June 2020. May 2021 saw a 17 percent increase in home prices when compared to May 2020, the largest annual gain on record.

Craig Lazzara, a managing director at S&P Dow Jones Indices, said this week that May’s astounding price increase supported the hypothesis that the current housing market performance is being driven by potential buyers moving from “urban apartments to suburban homes.”

The sale of newly built homes also fell by 6 percent in June and nearly 20 percent year over year, CNBC reports.

A low inventory was the cause behind this massive price increase, but CNBC notes that this may change as the number of newly listed homes rose by 5.5 percent in June compared with last year.

“Pending sales have seesawed since January, indicating a turning point for the market,” Lawrence Yun, chief economist for the National Association of Realtors told CNBC. “Buyers are still interested and want to own a home, but record-high home prices are causing some to retreat.”

In June, mortgage prices rose slightly higher, though they came back down by the end of the month. Yun told CNBC that he believes mortgage rates will rise more steadily closer to the end of the year.

“This rise will soften demand and cool price appreciation,” Yun said.