Pending Homes Sales Drop in June

The National Association of Realtors® (NAR) reported on Wednesday (7-27-22) their Pending Homes Sales Index (PHSI)—based on signed real estate contracts, not actual closings, for existing single-family homes, condominiums, and co-ops—declined 8.6% in June to a reading of 91.0. The PHSI has now declined in six out of the past seven months. Year-over-year contract signings have declined 20.0%.

An index of 100 is equal to the level of contract activity in 2001.

The NAR notes all four major regions posted month-over-month and year-over-year declines. In June, the West PHSI tumbled 15.9%, down 30.9% year-over-year. That was followed by the Southern region where the PHSI fell 8.9%, down 19.2% from June 2021. The Northeast PHSI declined 6.7%, down 17.6% from last year. The Midwest PHSI decreased 3.8%, down 13.4% year-over-year.

According to NAR, buying a home in June of 2022 was about 80% more expensive than in June 2019. Nearly a quarter of buyers who purchased a home three years ago would be unable to do so now because they no longer earn the qualifying income to buy a median-priced home today.