June Pending Home Sales Index Slips

The May index was the highest reading in more than six years, since a reading of 112.8 in December of 2006.

Total existing home sales are expected to rise more than 8% year-over-year in 2013, down from last month’s projection for an increase of 8.5% to 9%. National median home prices are forecast to rise by 11% this year, primarily due to the inventory shortage of existing homes for sale. The median price forecast is up from an increase of 10% projected last month.

The NAR’s chief economist noted:

Mortgage interest rates began to rise in May, taking some of the momentum out of contract activity in June. The persistent lack of inventory also is contributing to lower contract signings.

Pending home sales in the northeastern United States were unchanged in June, posting an index reading of 87.2, up 12.2% from June 2012. The index slipped 1% in the Midwest and 2.1% in the South. The index rose 3.3% in the West. Compared with the pending sales index in June a year ago, the Midwest is up 19.5%, the South is up 9.5% and the West is up 4.4%.