Pending Home Sales Show Recent Increase

According to a recent report from the National Association of Realtors (NAR), pending home sales have shown an increase in level of activity. Specifically, June’s pending home sales had increased by 0.3% collectively for the whole country from the month before. While the South and West sections saw slight decreases, the Northeast and Midwest grew. 

"The recovery has not taken place, but the housing recession is over," said NAR Chief Economist Lawrence Yun, "The presence of multiple offers implies that housing demand is not being satisfied due to lack of supply. Homebuilders are ramping up production and hiring workers."

The Pending Home Sales Index is a forward looking monitor of home sales that is based on contract signings and had increased by 0.3% this June. This was the first increase seen since February this year.

Home Loan Rates

NAR expects that the 30 year fixed mortgage rate will rise to 6.4% this year but then lower to 6.0% for 2024. "With consumer price inflation calming close to the Federal Reserve's desired conditions, mortgage rates look to have topped out," Yun added. "Given the ongoing job additions, any meaningful decline in mortgage rates could lead to a rush of buyers later in the year and into the next."

Home Sales and Prices

NAR projects existing-home sales will decline by a total of 12.9% from 2022 to 2023, coming in at 4.38 million, before rising 15.5%, to 5.06 million in 2024 next year. Compared to last year, the national median existing-home prices will hold steady before rebounding by 2.6% next year, to $395,000. The West, as the country's most expensive region, will see a decline in home prices while the more affordable Midwest region is likely to see a smaller increase. Housing starts for new construction are projected to drop 5.3% from 2022 to 2023 before increasing 5.4%, in 2024.