Inventory and affordability constraints, along with uneven regional numbers, hampered what was supposed to have been a boost to mortgage activity in June, leaving pending home sales slightly up but essentially flat for the month. The latest Pending Home Sales Index from the National Association of Realtors reported that, based on contract signings, pending home sales inched up by zero point 2 percent to 111 in June. This also is 1 percent higher than last June, but is noticeably down from this year's peak level in April of 115.
NAR chief economist Lawrence Yun said, quote, the reoccurring dilemma of strained supply causing a run-up in home prices continues to play out in several markets, leading to the last two months reflecting a slight, early summer cooldown after a very active spring. Unfortunately for prospective buyers trying to take advantage of exceptionally low mortgage rates, housing inventory at the end of last month was down almost 6 percent from a year ago, and home prices are showing little evidence of slowing to a healthier pace that more closely mirrors wage and income growth. Close quote
While saving for a down payment remains a significant obstacle for millennials who hope to achieve homeownership, a recent survey indicates they are saving. TD Bank’s second annual First-Time Home Buyer Pulse found that nearly two-thirds are saving cash to buy their first home. Millennials surveyed reported that their top three priorities before purchasing a home are saving for a down payment, paying off debt, and having a steady job.