The National Association of Realtors (NAR) Monday morning released its data on pending sales of existing homes for the month of June. The pending home sales index rose by 0.9% from a May reading of 105.9 to a June reading of 106.9. The June index is down 2.5% compared with June 2017 and has now lagged year-ago levels for six consecutive months.

May sales increased in all four NAR geographical regions.

The consensus estimate called for a month-over-month increase of 0.8% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.

The index has been above 100 (the “average” reading) for 44 straight months.

The NAR’s chief economist, Lawrence Yun, noted:

After two straight months of pending sales declines, home shoppers in a majority of markets had a little more success finding a home to buy last month. The positive forces of faster economic growth and steady hiring are being met by the negative forces of higher home prices and mortgage rates. Even with slightly more homeowners putting their home on the market, inventory is still subpar and not meeting demand. As a result, affordability constraints are pricing out some would-be buyers and keeping overall sales activity below last year’s pace.

Yun continued:

Home price growth remains swift and listings are still going under contract at a robust pace in most of the country, which indicates that even with rising inventory in many markets, demand still significantly outpaces what’s available for sale. However, if this trend of increasing supply continues in the months ahead, prospective buyers will hopefully begin to see more choices and softer price growth.

By region, June pending home sales rose to an index score of 93.7 in the Northeast, up 1.3 points compared with May and down 4.1% year over year. In the West, sales increased by 0.7 points to an index score of 94.7, down 5.6% compared to last year’s index.

Sales rose 2.9 points in the Midwest to an index score of 101.9, and remain down 2.1% year over year for the month. Sales in the South increased by 1.1 points to 124.2 in June and are down 0.3% compared with the year-ago index score.

Existing-home sales closed 2017 at around 5.51 million. The NAR’s Yun expects 2018 sales of around 5.46 million, down from a prior estimate of 5.49 million. The national median existing-home price is expected to rise by around 5% this year. In 2017 prices rose 5.7% and sales of existing homes increased by 1.1%. In 2016, sales of existing homes increased 3.8% and prices rose 5.1%.

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