Jul 1, 2021 - Economy

Home sales set to turn higher, reports suggest

Data: National Association of Realtors; Chart: Axios Visuals
Data: National Association of Realtors; Chart: Axios Visuals

New housing market reports suggest home sales are about to turn higher again.

Why it matters: Even though average home prices continue to surge, the number of new and existing homes sold has been falling for months.

Driving the news: Pending home sales — or homes under contract to be sold — unexpectedly jumped 8% in May, the National Association of Realtors revealed Wednesday.

  • "Pending home sales usually lead existing home sales by one or two months, so we likely will see existing home sales move higher in upcoming reports," JPMorgan economist Daniel Silver wrote.
  • Separately, a report from Realtor.com found new listings in June jumped 10.9% from May.

What they’re saying: "The issue for home sales remains tight inventories and a lagging supply response that is boosting prices," High Frequency Economics' Rubeela Farooqi said in an email. "But record high prices are likely an incentive for sellers to come to market."

  • Farooqi added that buyers have also been motivated by low mortgage rates, which some argue is thanks to the Fed.

Be smart: These two reports are not enough to confirm the downward trend of sales has reversed.

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