The National Association of Realtors just released their index of pending home sales. The good news is that it is up 7.4% from year-ago levels. The bad news is that the rush of first time buyers into the market has failed to materialize.
Interest rates eased somewhat in July compared to June, and there are widespread forecasts that the Fed will begin raising interest rates in September, albeit at a slow, moderate pace. Nonetheless, in an environment of extremely favorable rates, first time buyers are reluctant to take the plunge. As we recently reported, one reason for the reluctance is the sizable student loan debt that the younger generation is saddled with.
CNBC.com has more:
“Contract activity in most of the country held steady last month, which bodes well for existing-sales to maintain their recent elevated pace to close out the summer,” said Lawrence Yun, chief economist for the NAR in a release. “While demand and sales continue to be stronger than earlier this year, Realtors have reported since the spring that available listings in affordable price ranges remain elusive for some buyers trying to reach the market and are likely holding back sales from being more robust.”Getty ImagesA sale pending sign in front of a home in San Anselmo, California.
Closed sales of existing homes, based on contracts signed in May and June, increased two percent in July, according to NAR, as the number of homes for sale remained stubbornly low, and higher home prices continued to sideline first-time home buyers. Yun said he had expected to see more first-time buyers return to the housing market this summer and was surprised by their poor showing.
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