Pending Home Sales fell 1.8%

Wednesday, Jul 29 2015

The Pending Home Sales fell 1.8% to 110.3 in June but is still 8.2 percent above June 2014 (101.9). Analysts were predicting 1.0% incline. Despite last month's decline, the index is the third highest reading of 2015 and has now increased year-over-year for ten consecutive months.

Lawrence Yun, NAR chief economist, says although pending sales decreased in June, the overall trend in recent months supports a solid pace of home sales this summer. "Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers' comfort level," he said.

"The demand is there for more sales, but the determining factor will be whether or not some of these buyers decide to hold off even longer until supply improves and price growth slows."According to Yun, existing-home sales are up considerably compared to a year ago despite the share of first-time buyers only modestly improving. The reason is that the boost in sales is mostly coming from pent-up sellers realizing their equity gains from recent years.

"Strong price appreciation and an improving economy is finally giving some homeowners the incentive and financial capability to sell and trade up or down," adds Yun. "Unfortunately, because nearly all of these sellers are likely buying another home, there isn't a net increase in inventory. A combination of homebuilders ramping up construction and even more homeowners listing their properties on the market is needed to tame price growth and give all buyers more options."

Sterling is currently being traded few points above 1.5670 level, euro is around 1.1030 area, while Aussie is above 0.7310 level. Later today, Fed interest rate decision and the following statement will be released.

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