The Pending Home Sales Index increased for the first time since February and investors retreated, giving first-time buyers a better chance to enter the market. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), increased to 110.2 in June, up 1.5% from an upwardly revised 108.6 in May, and up 0.5% from last year.
The PHSI increased 2.9% in the West, 2.1% in the South and 0.7% in the Northeast, while falling 0.5% in the Midwest. Year-over-year, the PHSI increased 2.9% in the Northeast and 2.6% in the South, while falling 1.1% in the West and 3.4% in the Midwest.
NAR reported last week that existing sales to investors were the lowest of the year at 13%, which in turn drove all cash transactions to their smallest share since June 2009. The silver lining is that less competition from investors enables prospective first-time buyers to enter the market. However, NAR emphasized that inventory shortages at the lower end of the market will continue to challenge first-time buyers.