Rising inventory is shifting the housing market in buyers' favor.
Pending home sales, a forward-looking indicator of home sales based on contract signings, rose 4.8% in June from the month prior, according to the National Association of Realtors. Economists polled by Bloomberg had expected a 1.5% monthly increase.
“The rise in housing inventory is beginning to lead to more contract signings,” NAR chief economist Lawrence Yun said in a press statement. “Multiple offers are less intense, and buyers are in a more favorable position.”
The jump in buyer activity suggests that more is likely to follow.
“Even more inventory is expected to come onto the housing market in the upcoming months ahead of the normal, seasonal declines in the winter,” added Yun. “The Northeast’s small gain in contract signings is due to the ongoing housing shortage situation in that region, leading to stronger home price gains. It is a good time to list.”
Mortgage rates have been a point of distress for homeowners to sell, as many were locked in at ultra-low rate during the pandemic. But rates havecome down since they topped 7% earlier this summer.
However, some buyers are still waiting on the sidelines as home pricesreach new highs. Applications for a mortgage to purchase a home fell 2% from the prior week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday.
“Borrowers may be waiting for signs that mortgage rates will drift lower as the Federal Reserve begins to cut short-term rates,” Mike Fratantoni, MBA's SVP and chief economist, wrote in a statement.