US Pending Home Sales Trend Down
US pending home sales showed decreases last month as mortgage rate hikes have pushed many buyers out of the market.
Declines in pending home sales – which highlight contract transactions as opposed to closed transactions – provide evidence that the current market's trend is not sustainable. A continued rise in home prices combined with higher mortgage rates is a major cause for concern as far as affordability. A sustainable recovery would include more even home prices with lower rates to ease a depressed market back from its slump.
Experts are saying that the current figures are not too concerning yet, as regions like the Midwest and South have not seen these declines. Areas that show slowing in transactions are higher value and cost regions of the country like the Northeast and the Western US.
Solutions to this current problem might include more new construction homes in areas affected, so as to alleviate supply and price worries.
Pending home sales in the Northeast dipped 6.5 percent, while pending transactions in the South increased by 2.6 percent to 121.5 (7.7 percent higher than the previous year.) Pending sales fell by 1 percent in the Midwest (but is still 14.5 percent higher than the previous year) and 4.9 percent in the West.
Do you think these declines in US pending homes sales are cause for concern? What do you think a proper solution might be to sustain recovery?
We welcome your opinions and perspectives in the comment section below.
Photo courtesy of jsheehan200’s Flickr