Pending home sales gained 0.9% to an index reading of 106.9 in June, after an unrevised 0.5% fall to 105.9 in May, according to a report released Monday by the National Association of Realtors.
An index of 100 is equal to the average level of contract activity during 2001.
Year-over-year the pending homes sales index decreased 2.5% from last June, when the index was 109.6.
IFR Markets predicted the index would be up 0.1%.
Regionally, pending sales were higher. Northeast sales rose 1.4% to 93.7, in the Midwest sales grew 0.5% to 101.9, while rising 0.7% in the West to 95.4, and gaining 1.1% in the South to 124.2.
“After two straight months of pending sales declines, home shoppers in a majority of markets had a little more success finding a home to buy last month,” NAR Chief Economist Lawrence Yun said. “The positive forces of faster economic growth and steady hiring are being met by the negative forces of higher home prices and mortgage rates. Even with slightly more homeowners putting their home on the market, inventory is still subpar and not meeting demand. As a result, affordability constraints are pricing out some would-be buyers and keeping overall sales activity below last year’s pace.”
Supply, which has damped issuance, may be turning up, as existing inventory last month, rose on a yearly basis for the first time in three years, he said.
“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,” he said. “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.”