“The market is at an interesting point with rising inventory and lower demand”: National Association of Realtors
By Wolf Richter for WOLF STREET.
We here in our little corner don’t normally more than glance at the “pending home sales” data by the National Association of Realtors. It’s a forward-looking indicator of “closed home sales” based on contract signings – on deals that haven’t closed yet and could still fall apart. But today’s release of pending sales was interesting for several reasons, including the NARs’ expectation that the collapsed demand along with rising inventories is going to cause home prices to “stabilize” in the second half of the year. So here we go.
The index value of pending home sales in May dropped by 2.1% from April, and by 6.8% from a year ago, to 70.8 (seasonally adjusted annual rate), what headlines dubbed an “all-time low” or “record low” in the data going back to 2001, and that’s close enough. In the NAR data we have access to via YCharts, today’s reading was still a hair above the prior all-time low of April 2020 (index value of 70). But the idea is the same: demand has collapsed, even as inventories have risen.