The US property market is being slowed by high mortgage interest rates, according to new figures from the National Association of Realtors (NAR). The Pending Homes Sales Index showed a drop in transactions in July, based on contract signing data. During the month, pending sales declined 1.3 per cent to 109.5. This is down from 110.9 per cent in July but still 6.7 per cent above July 2012.
July's figures represent the 27th consecutive month pending sales have stayed above levels recorded for the year previous. However, there are still questionable market fundamentals and an uneven growth pattern across the country. Lawrence Yun, NAR chief economist, said: "The modest decline in sales is not yet concerning, and contract activity remains elevated, with the south and midwest showing no measurable slowdown. However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the northeast and the west."
A lack of supply is adding to price pressure in the west and if new homes aren't built soon, Mr Yun claims the region could soon face significant affordability problems. Sales are still dropping in the region, down 4.9 per cent in July to 108.6. This is 0.4 per cent below July 2012.
In the northeast, sales also dropped 6.5 per cent to 81.5 per cent in July. However, this is still 3.3 per cent higher than a year ago. The midwest saw one of the smallest drops, down one per cent to 113.2. This is 14.5 per cent above July 2012. In the south, sales actually increased 2.6 per cent to 121.5, 7.7 per cent above last year.
However, overall NAR expects a positive year for US property, with existing home sales rising ten per cent during 2013 to around 5.1 million. By next year, it is expected there will be 5.2 million sales. But a supply imbalance will cause prices to surge higher, with the median existing home price growing by 11 per cent in 2013 and between five and six per cent in 2014.
Article by +https://plus.google.com/117987778295738303451?rel=author on behalf of Propertyshowrooms.com
July's figures represent the 27th consecutive month pending sales have stayed above levels recorded for the year previous. However, there are still questionable market fundamentals and an uneven growth pattern across the country. Lawrence Yun, NAR chief economist, said: "The modest decline in sales is not yet concerning, and contract activity remains elevated, with the south and midwest showing no measurable slowdown. However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the northeast and the west."
A lack of supply is adding to price pressure in the west and if new homes aren't built soon, Mr Yun claims the region could soon face significant affordability problems. Sales are still dropping in the region, down 4.9 per cent in July to 108.6. This is 0.4 per cent below July 2012.
In the northeast, sales also dropped 6.5 per cent to 81.5 per cent in July. However, this is still 3.3 per cent higher than a year ago. The midwest saw one of the smallest drops, down one per cent to 113.2. This is 14.5 per cent above July 2012. In the south, sales actually increased 2.6 per cent to 121.5, 7.7 per cent above last year.
However, overall NAR expects a positive year for US property, with existing home sales rising ten per cent during 2013 to around 5.1 million. By next year, it is expected there will be 5.2 million sales. But a supply imbalance will cause prices to surge higher, with the median existing home price growing by 11 per cent in 2013 and between five and six per cent in 2014.
Article by +https://plus.google.com/117987778295738303451?rel=author on behalf of Propertyshowrooms.com