Pending home sales down for the second month
A forward-looking housing market metric has flashed another declining sales signal for NE Tenn. – SW Va.
Sellers accepted 19 fewer contracts than they did in April and 62 fewer than May last year. May was the second straight month that pending sales declined from the previous month.
Pending sales are a leading indicator of housing activity based on signed contracts for existing single-family homes and condominium sales in the region monitored by the Northeast Tennessee Association of Realtors (NETAR). Since resales go under contract 30 to 60 days before they close, accepted contracts offer insight into the direction home sales will take.
“Pending sales were down from the previous month, down from the same month last year, and the three-month moving average declined,” NETAR President Rick Chantry said. “That’s the first time all three have declined. It’s the most consistent signal yet that higher mortgage rates, record-high prices, inflation at a 41-year high, and gasoline prices nearing $5 a gallon are beginning to knock the wind out of local existing home sales.”
But those economic conditions haven’t damped the price growth rate. Both the typical and average existing home sales prices reached an all-time highs last month.
Although new listing slipped below April’s total, the slower sales pace nudged May’s active inventory a little higher. At the month’s end, the region has 1.2 months of inventory on the market. Balanced market conditions are 5.5 to 6 months of inventory. “The region hasn’t seen balanced conditions since the first quarter of 2018,” Chantry said.
The typical home that sold in May was on the market for 43 days before it closed. The average listings went under contract in the 13 days.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,600+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at https://netar.us