The numbers: U.S. pending-home sales fell in May, the National Association of Realtors said on Thursday but the housing market is still showing signs of being in recovery mode.
Demand for homes is still strong, despite mortgage rates hovering near 7%, but buyers are finding few properties for-sale to choose from as homeowners hold out on selling.
The shortage in housing inventory has become so dire that it’s pushed pending home sales down in the spring, which is generally the peak season for home-buying.
Sales fell by 2.7% from the previous month, according to the monthly index released Thursday by the National Association of Realtors (NAR).
The figure fell short of expectations on Wall Street. Economists expected pending home sales to be flat in May.
Pending home sales reflect transactions where the contract has been signed for an existing-home sale, but the sale has not yet closed. Economists view it as an indicator for the direction of existing-home sales in subsequent months.
Big picture: Despite the headline figure revealing that home sales are down, the housing market isn’t in a crisis—it’s actually in recovery mode.
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Source: www.realtor.com
ENB
Sandstone Group
