Pending home sales in June sank below the all-time basement level they reached in May as fall-out from the end of the tax credit continues to traumatize housing markets across the county.
The index, which is a measure reflecting sales contracts, not closings, fell another 2.9 percent in June to reach 75.7, the lowest level in the index’s decade-long history, breaking the record set in May.
Pending sales are 18.76 percent below the level of a year ago and 25 percent below 2001, when the index was created.
The index could continue to set new lows in July and August, according to NAR’s Lawrence Yun. “There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” he warned.
If so, the four months following the end of the tax credit would be a longer and deeper slump than boost on sales following the extension and expansion of the tax credit. From January through April, the index rose over 20 points to reach 110.9.
Yun also said he expects that over the short term, inventory will look high relative to home sales but doesn’t foresee any “meaningful change” in home values since prices have come down to “fundamentally justifiable levels.” Last month, the national inventory increased to an 8.9 months’ supply.