Pending home sales in the U.S. unexpectedly saw a continued decrease in the month of May, the National Association of Realtors revealed in a report released on Thursday.
NAR said its pending home sales index slumped by 2.1 percent to 70.8 in May after plunging by 7.7 percent to 72.3 in April. Economists had expected pending home sales to jump by 2.5 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
\"The market is at an interesting point with rising inventory and lower demand,\" said NAR Chief Economist Lawrence Yun. \"Supply and demand movements suggest easing home price appreciation in upcoming months.\"
He added, \"Inevitably, more inventory in a job-creating economy will lead to greater home buying, especially when mortgage rates descend.\"
The unexpected decrease by pending home sales partly reflected a steep drop in the South, where pending home sales tumbled by 5.5 percent.
Pending home sales in the Midwest also dipped by 0.4 percent, while pending home sales in the Northeast and West jumped by 1.1 percent and 1.4 percent, respectively.
A separate report released by the Commerce Department on Wednesday showed a substantial decrease by new home sales in the U.S. in the month of May.
The Commerce Department said new home sales plunged by 11.3 percent to an annual rate of 619,000 in May after jumping by 2.0 percent to a revised rate of 698,000 in April.
Economists had expected new home sales to rise to an annual rate of 640,000 from the 634,000 originally reported for the previous month.