The National Association of Realtors keeps a measure of how many contracts to buy homes are signed each month. Its Pending Home Sales Index is considered a good indicator of future home sales, as contract signings typically precede closings by several weeks. In May, the index fell 2.7 percent from the month before, with pending sales down in three of four regions – only the Northeast saw an increase.
Lawrence Yun, NAR's chief economist, says demand remains resilient despite the slowdown. “Despite sluggish pending contract signings, the housing market is resilient with approximately three offers for each listing,” Yun said. “The lack of housing inventory continues to prevent housing demand from being fully realized.”
In other words, the lack of homes for sale is the primary reason for slower contract signings. Demand from buyers remains strong and continues to outpace the supply of available, existing homes.
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