Pending home sales fell 1.1% in June, breaking a three month streak of improvement after a dismal winter. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), decreased 1.1% in June to 102.7 from a downwardly revised May level of 103.8. The June reading was down 7.3% on a year-over-year basis.
The June PHSI increased 1.1% and 0.2% in the Midwest and West respectively, but decreased by 2.4% and 2.9% in the South and Northeast. All regions declined year-over-year, ranging from a 3.2% decrease in the Northeast to a 16.7% decrease in the West.
Early last week NAR reported a 2.6% increase in June existing home sales, but two days later Census reported an 8.1% decrease in June new home sales. The slight June decline in the PHSI after three months of improvement suggests that the existing home market will improve moderately during the remainder of this summer. The growth in household formations and strong pent-up demand will contribute to maintaining that moderate level of improvement throughout this year.