Pending home sales edged down in June, with near-term sales expected to be notably lower after the surge in home buying that accompanied the deadline for the U.S. home buyer tax credit, according to the National Association of Realtors.
The NAR Pending Home Sales Index, a forward-looking indicator, declined 2.6% to 75.7 based on contracts signed in June from an upwardly revised level of 77.7 in May, and is 18.6% below June 2009 when it was 93.0. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.
Lawrence Yun, NAR chief economist, said lower home sales are expected in the short term.
“There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” Yun said. “Over the short term, inventory will look high relative to home sales. However, since home prices have come down to fundamentally justifiable levels, there isn’t likely to be any meaningful change to national home values. Some local markets continue to show strengthening prices.”
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