“The market is at an interesting point with rising inventory and lower demand,” NAR chief economist Lawrence Yun said in the report. “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.”
Despite the decline, experts believe the housing market may be poised for a change. With more homes becoming available and mortgage rates potentially moderating, there’s a chance for increased buyer activity.
“Pending sales are a forward-looking indicator of home sales based on contract signings, so two consecutive months of declining pending home sales suggest a negative outlook for sales activity,” said First American deputy chief economist Odeta Kushi. “However, these declines occurred when mortgage rates rose in April and May. With rates moderating in June, purchase mortgage applications indicate that rate-sensitive buyers are hesitantly responding.”
The NAR also released its economic forecast for the housing market, predicting that mortgage rates will remain above 6% in 2024 and 2025, even with the Federal Reserve’s recent interest rate cuts.
“If mortgage rates continue their descent alongside rising inventory levels, some buyers may be enticed off the sidelines and boost the summer home-buying season. Nevertheless, a robust summer recovery is unlikely given ongoing affordability constraints,” Kushi said.
Source: mpamag.com