Contract signings remained 2.5 percent below their 2017 numbers on an annual basis, despite rising slightly by 0.9 percent in June, according to the latest Pending Home Sales Index released by the National Association of Realtors (NAR) on Monday.
The index is a forward-looking indicator based on contract signings during a particular month and in a year.
According to the data released by NAR, pending home sales increased in all four major regions in June, but overall activity lagged its year-ago levels for the sixth consecutive month.
One of the reasons for the slight uptick was an increase in homeowners putting their homes on the market. Yet, "inventory is still subpar and not meeting demand," said Lawrence Yun, Chief Economist at NAR. "As a result, affordability constraints are pricing out some would-be buyers and keeping overall sales activity below last year's pace."
Yun said that the worst of the supply crunch impacting the housing market across the U.S. has probably passed. "Last month, existing inventory was up on an annual basis, albeit slightly, for the first time in three years," Yun said.
Citing Realtor.com data, he pointed out to several metros that saw big jumps in active listings in June. They included Portland, Oregon; Providence, Rhode Island; Seattle, Washington; Nashville, Tennessee; and San Jose, California.
Regionally, pending home sales in the West remained well below last year, the data indicated. Though the index in this region rose 0.7 percent in June, it was 5.6 percent below the same period the previous year.
The South, on the other hand, climbed 1.1 percent in June and remained 0.7 percent below the same period last year.
Looking ahead, Yun projected existing home sales in 2018 to decrease 1 percent and national media existing-home prices to increase by 5 percent.
“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,” Yun said. “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.”
Read about the pending home sales data in May: