Pending home sales fell in July, according to data released Monday by the National Association of Realtors (NAR), down for the second month in a row amid a record spike in house prices.
The NAR’s pending home sales index fell 1.8% in July after falling 1.9% in June. Sales were down 8.5% on an annual basis from July, falling as home prices continued to break records in the first half of 2021.
âThe market may be starting to cool slightly, but at the moment there is not enough supply to meet demand from potential buyers,â said Lawrence Yun, chief economist of NAR. “That said, stocks are slowly rising and home buyers should start to see more options in the coming months.”
Home sales and prices have skyrocketed for much of 2020, as the onset of the pandemic and the government’s response to the crisis sparked a buying boom. But this rush to buy housing has exhausted an already insufficient supply of housing, price excluding many potential buyers.
The median selling price of a single-family home increased to $ 390,500 and the average price hit $ 446,000 in July, according to federal data, each a new record. The same month, new housing construction fell 7 percent while builders have struggled to make up for delays accumulated throughout the pandemic.
âThere is always a lot of interest in homes listed for sale, but the multiple and frenzied offers – sometimes double-digit offers on a property – have worn off in most areas,â Yun said.
“Even in a somewhat calmer market, a number of potential buyers still choose to forgo assessments and inspections.”
A steady decline in home sales could eventually force sellers to cut prices and give buyers more time and flexibility when buying homes. But affordable housing advocates have urged policymakers to take action to expand the supply of accessible housing, especially after the COVID-19 pandemic left millions facing homelessness and financial peril.
The Democratic $ 3.5 trillion plan for infrastructure, social services and climate is expected to include billions of dollars to build public housing and encourage private construction of cheaper homes.
Republican lawmakers have ruled out supporting the package, which is meant to be passed only with Democratic votes as part of the budget reconciliation process. But lawmakers on both sides have expressed support for zoning law reform measures that would make it easier to build affordable housing in areas that had previously excluded it by regulations.