May’s Pending Home Sales Index decreased 0.8 percent to a level of 108.5 from 109.4 in April, and is 1.7 percent down year-over-year, the second straight month of annual declines and the most recent consecutive decline since November and December 2016, according to the National Association of Realtors.
The culprit is “critically” low inventory levels across the country, said NAR Chief Economist Lawrence Yun in a statement.
“Monthly closings have recently been oscillating back and forth, but this third consecutive decline in contract activity implies a possible topping off in sales,” he said. “Buyer interest is solid, but there is just not enough supply to satisfy demand. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast.”
The PHSI in the Northeast decreased 0.8 percent to 96.4 in May. The Midwest index was unchanged at 104.5. The South declined 1.2 percent to 123.4, and the West saw the PHSI dip 1.3 percent to 98.6.