Pending Homes Sales (PHSI) Flat in June, Missing the Median Forecast

The National Association of Realtors said Wednesday the Pending Home Sales Index (PHSI) was essentially flat in June, missing the median forecast. Pending home sales, or a gauge of contracts to buy previously-owned homes, rose 0.2% last month, less than the 1.4% rise economists expected.

“With only the Northeast region having an adequate supply of homes for sale, the reoccurring dilemma of strained supply causing a run-up in home prices continues to play out in several markets, leading to the last two months reflecting a slight, early summer cooldown after a very active spring,” said NAR chief economic Lawrence Yun. “Unfortunately for prospective buyers trying to take advantage of exceptionally low mortgage rates, housing inventory at the end of last month was down almost 6 percent from a year ago,1 and home prices are showing little evidence of slowing to a healthier pace that more closely mirrors wage and income growth.”

Regional Breakdown

The PHSI in the Northeast increased 3.2% to 96.0 in June and is now 1.7% above a year ago. In the Midwest, contracts increased by 0.8% to 108.9 and the PHSI is now 1.6% higher than June 2015.

Pending home sales in the South fell by 0.6% to 125.9, but are 1.8% higher than last June. The index in the West declined 1.3% in June to 101.3, and is now 1.8% below a year ago.