Washington, DC, United States (4E) – Sales of previously owned homes in the U.S. fell in June, a sign that the housing recovery is yet to gain traction despite a decline in interest rates.
The pending home sales index, which reflects purchases under contract but not yet closed, dropped 1.1 percent to 102.7 in June from the previous month, snapping a three-month gain, according to the National Association of Realtors report released Monday. The reading shows average market activity, but not robust, according to the trade group.
Economists polled by The Wall Street Journal had called for a 0.5 percent increase in June sales.
Pending-home sales fell 7.3 percent in June from the year-ago month. The figure suggests many Americans are not able or still not willing to get into the market despite record-low interest rates and an improvement in hiring activity. Lenders still has tight lending standards, and home prices have climbed significantly over the last two years. At the same time, income growth in the U.S. remains slow.
Monday’s results showed pending sales in June dropped 2.9 percent in the Northeast region, fell 2.4 percent in the South, inched up 1.1 percent in the Midwest, and stayed mostly flat in the West.