Americans signed more contracts to buy homes in June, snapping a three-month decline in pending sales.
The National Association of Realtors said Monday that its pending home sales index rose 1.5 percent in June to 110.2. The gain still puts the pace of contract signings below its March level. The index has increased just 0.5 percent over the past 12 months.
The U.S. housing market is increasingly confronted with a shortage of properties listed for sale. In the aftermath of the housing bubble bursting a decade ago, there are multiple reasons for the lack of homes available to buy. Investors that bought foreclosed houses during the downturn are now renting them at a tidy profit, while many existing homeowners say they cannot afford the down payment to sell their house and buy a more expensive property.
As a consequence, prices are climbing faster than wages while number of homes listed for sale has plunged. All of this limits just how much sales volumes can advance.
There were 1.96 million homes for sale in June, a 7.1 percent decline from a year ago.
The median sales price has climbed 6.5 percent over the past year to $263,800, a rate more than double the increase in hourly average earnings.
Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed. This should signal a slight increase in home sales in the next few months. The Realtors reported last week that completed sales fell 1.8 percent in June to a seasonally adjusted annual rate of 5.52 million.