WASHINGTON–Mortgage rates have declined, but pending home sales were still down in May when compared to April.
According to the National Association of Realtors, home sales declined 0.8% month-to-month and are now 1.7% lower than May 2016. Many analysts had been expected to see an increase.
"Monthly closings have recently been oscillating back and forth, but this third consecutive decline in contract activity implies a possible topping off in sales," suggested Lawrence Yun, chief economist for the NAR, in a statement. "Buyer interest is solid, but there is just not enough supply to satisfy demand. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast."
According to the Realtors, the number of home sales that closed this spring were slightly higher than a year ago, but the lack of listings clearly held the market back. The supply of homes for sale at the end of May was down more than 8% from a year ago, and homes that were listed sold at the fastest rate on record, the NAR said.
Meanwhile, the number of mortgage applications also slid down the stairs for the week ended June 23.
According to the Mortgage Bankers Association (MBA), its Market Composite Index, which measures application volume, fell 6.2% on a seasonally adjusted basis, from the week ended June 16 and was down 7% without an adjustment.
The MBA said the decrease affected applications for both refinancing and for purchase, although refinancing took the larger hit. That index dropped by 9% and the refinance share of activity retreated a full percentage point to 45.6%.
The Purchase index was down from the prior week by 4% when seasonally adjusted and 5% unadjusted. Compared to the same week in 2016, the unadjusted index maintained an 8% edge.
Thirty-year mortgages had an average contract rate of 4.02%, down from 4.04%. Points increased 0.41 from 0.35 and the effective rate was unchanged.
The average rate for 15-year fixed-rate mortgages decreased to 3.39% with 0.33 point from 3.40% with 0.38 point. The effective rate also decreased, the MBA said.