- Akin Oyedele/Business Insider
Pending home sales fell 3.7% in May, more than expected, according to the National Association of Realtors.
This was the first annual decline in two years.
Economists had forecast that pending sales fell 1.1%, according to Bloomberg, following a 3.9% jump in April that was revised lower.
Lawrence Yun, the NAR chief economist, said the strong pace of home sales in recent months reduced what was available in May and dragged down contract activity.
“There are simply not enough homes coming onto the market to catch up with demand and to keep prices more in line with inflation and wage growth,” Yun said in the release.
Pending home sales are used as a forward-looking indicator of the housing market, as they are based on signed contracts prior to final sales.
Yun added that market volatility following the Brexit vote is likely to cause lower mortgage rates and increase demand from foreign buyers looking for safe assets. However, any impact on the US economy from turmoil overseas could weaken home buying.