Contracts to buy previously owned homes unexpectedly declined for the second straight month in May, mostly due to a shortage of properties for sale.
The National Association of Realtors said on Wednesday its pending home sales index fell to a reading of 105.9, down 0.5 per cent from the prior month. April’s 1.3 per cent decline was unrevised.
Economists polled by Reuters had forecast pending home sales rising 0.5 per cent in May.
On a year-on-year basis, pending home sales fell for the fifth month in a row in May.
Pending home contracts are seen as a forward-looking indicator of the state of the housing market because they become sales a month or two later.
The housing market has been mixed this year. On Monday, data showed sales of new U.S. single-family homes increased more than expected in May as transactions in the South surged to their highest level in nearly 11 years.
But data last week showed U.S. home sales unexpectedly tumbling for the second straight month in May as an acute shortage of properties on the market pushed house prices to a record high.
In May, contracts in the Northeast increased 2.0 per cent and were up 2.9 per cent in the Midwest. They also edged up 0.6 per cent in the West but slumped 3.5 per cent in the South.
“Several would-be buyers this spring were kept out of the market because of supply and affordability constraints,” Lawrence Yun, the NAR’s chief economist, said in a statement. “The healthy economy and job market should keep many of them actively looking to buy, and any rise in inventory would certainly help them find a home.”