July 28, 2018

Pending home sales up in June; growth rate softer

Pending home sales increased for the fourth straight month in June, and like some other local housing and economic indicators the growth rate is getting softer.

The Northeast Tennessee Association of Realtors (NETAR) New Pending Home Sales Index (PHSI), a forward-looking indicator based on new contract signing reported by Realtor Property resource (RPR), was up 0.8 index points from May. That's the second time in six months the month-to-month increase has been less than a full point.  At the same time, when compared to June last year the index is up 9.3 percent.

There were 834 new approved contracts in June bringing the pending sales total to 1,179, said Aaron Taylor NETAR President. "In June we had 3.9 months inventory of existing single-family homes in the region. It was the tightest inventory we've seen in over two years," he added.

June's new pending sales index was 132.5 up from 131.7 in May. The PHSI is a leading indicator for the housing sector based on pending sales of existing homes, condos and townhomes. The benchmark for the index is the 2015 annual average for new approved contracts. A sale is listed as pending when a contract has been signed, but the transaction has not closed. Sales are typically finalized in a month or two after signing. It's not uncommon to see as many as 5% of pending sales fall through. Lately, that fall-through rate has been a little higher due to more sale of current home and financing contingencies.

NETAR is the voice for real estate in Northeast Tennessee - is the largest trade association in Northeast Tennessee, Southwest Virginia region representing over 1,200 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries.