U.S. pending home sales unexpectedly rebound in May

[mahatmakanejeeves]

Reuters

U.S. pending home sales unexpectedly rebound in May

Mon, June 27, 2022, 10:01 AM

WASHINGTON (Reuters) - Contracts to buy U.S. previously owned homes unexpectedly increased in May after declining for six straight months, but higher mortgage rates are cooling demand for housing.

The National Association of Realtors (NAR) said on Monday its Pending Home Sales Index, based on signed contracts, rose 0.7% last month to 99.9, rebounding from a two-year low in April. Pending home sales increased in the Northeast and the densely populated South, but fell in the West and Midwest.

Economists polled by Reuters had forecast contracts, which become sales after a month or two, would drop 3.7%. Pending home sales plunged 13.6% in May on a year-on-year basis.

"Despite the small gain in pending sales from the prior month, the housing market is clearly undergoing a transition," said NAR chief economist Lawrence Yun. "Contract signings are down sizably from a year ago because of much higher mortgage rates."

{snip}

[bucolic_frolic]

1. If you think house prices are high, try renting /nt

[Tadpole Raisin]

2. Clearly undergoing a transition...

Of course it’s always a good time to buy a home.

Buy because:
Rates are the lowest they’ve ever been
Hurry before rates go up
Etc., etc.,

Eons ago I asked a real estate friend what interest rate environment was the best one to buy a house (with the caveat that you had enough money and would pay down as able). She was perplexed.

I said buy when interest rates are high as ‘normally’ without crazy financing schemes the principle is lower. Sell when interest rates are low as principle rises to make the same monthly nugget.

And if you try to pay down the principle early you will come out way ahead all things being equal.

Problem is there hasn’t been much of a normal market for decades and it is harder to time things plus life has its own agenda.

I always laugh at the NAR spin.