There is good news to be celebrated in the new home sector. All measures, from new home sales to housing starts to building permits and housing completions, are up year-over-year. Given the dearth of housing inventory in the Existing-Home Sales sector, this is cause for celebration. Many current homeowners are unlikely to ditch their golden handcuffs of low-interest rate mortgages and may have some separation anxiety with moving. New home inventory helps to alleviate this problem. Additionally, another segment is growing within the housing starts sector: built-for-rent (BFR).

In May, pending home sales experienced a slight decline of 2.1%, as reported by the National Association of REALTORS® (NAR). This decrease was primarily driven by monthly losses in the Midwest and South, while the Northeast and West saw gains. However, when looking at year-over-year data, all U.S. regions recorded reductions in pending home sales.

Key Highlights:

• Pending Home Sales Index (PHSI):
  • The PHSI, a forward-looking indicator based on contract signings, decreased to 70.8 in May.
  • This represents a 6.6% drop in pending transactions compared to the same month last year.
  • For context, an index of 100 corresponds to the level of contract activity in 2001.

NAR Chief Economist Lawrence Yun noted, “The market is at an interesting point with rising inventory and lower demand. Supply and demand movements suggest easing home price appreciation in upcoming months. Inevitably, more inventory in a job-creating economy will lead to greater home buying, especially when mortgage rates descend.”

This month, we’re diving into the critical issue of advancing homeownership amidst today's market shortages. Join us as Jessica Lautz, NAR’s Deputy Chief Economist and VP of Research, leads a compelling discussion with two dynamic real estate leaders: Danielle Blake, Chief of Commercial, Miami REALTORS®, and Randy Day, 2022 President, Utah Association of REALTORS® and President of Presidio Anasazi Realty Moab.

Highlights of the Podcast:

• Shared Challenges, Unique Solutions: Despite operating in vastly different real estate markets, Miami and Moab face similar barriers to homeownership, including a shortage of buildable land and restrictive zoning and planning ordinances.