Persistent tight inventory that has kept a lid on U.S. housing sales has likely eased as pending home sales increased in June following a fall the preceding month, according to the National Association of Realtors, or NAR.
The pending home sales index, a forward-looking indicator based on contract signings, rose by 0.9% to 106.9 in June from 105.9 in May. In annual terms, sales fell 2.5%
NAR Chief Economist Lawrence Yun said inventory remains subpar and does not meet demand, but indicated that the worst of the supply crunch affecting most of the country has possibly passed.
Existing inventory rose annually last month for the first time in three years, and year-over-year changes in inventory in June showed big jumps in active listings in several large metro areas, according to Yun.
"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 added. "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."