The numbers: U.S. pending-home sales fell in June by 8.6%, according to the monthly index released Wednesday by the National Association of Realtors.
Analysts polled by the Wall Street Journal had forecast the pending home sales index to drop by 1%.
The drop in pending home sales is the biggest since the depths of the pandemic in April and March 2020. It also follows gloomy data on new home sales, builder confidence, as well as declining mortgage application volume.
Key details: Compared with a year earlier, transactions were down 20%. All four major regions posted declines in June on a year-over-year basis, largest of which was in the West.
Big picture: Potential homebuyers are likely sitting on the sidelines, amid recession fears, high inflation, and higher mortgage rates.
Though home prices have yet to come down, there are signs of price growth decelerating, which could start to make homes more affordable..
The index reflects transactions where the contract has been signed for an existing-home sale, but the sale has not yet closed. Economists view it as an indicator for the direction of existing-home sales in subsequent months.
What the realtors said: “Home sales will be down by 13% in 2022, according to our latest projection,” NAR Chief Economist Lawrence Yun said.
Yun added that buying a home in June of 2022 was 80% more expensive than in 2019.
Market reaction: The Dow Jones Industrial Average
and the S&P 500
were both slightly up in early trading on Wednesday. The yield on the 10-year Treasury note
was down slightly to 2.765%.