U.S. pending home sales rebounds in June, existing home sales likely to pick up in months ahead

U.S. pending home sales rebounded in June. Sales rose strongly by 0.9 percent on a sequential basis, after declining 0.5 percent in May. This was above consensus expectations of a rise of 0.1 percent. Sales rose in all regions, implying a widespread rebound from May. The Northeast recorded the largest rise, followed by the South, West, and Midwest.

On a year-on-year basis, pending home sales dropped 4 percent as the drag from the softness in sales earlier in the year weighs on the annual calculations, noted Barclays in a research report. The subdued inventory situation for existing homes continues to restrain sales activity.

Pending home sales measure housing contract activity are based on signed real estate contracts for existing single-family home, condos, and co-ops. Around 80 percent of pending homes sales would become existing home sales in two months.

“As a result, we can expect existing home sales to pick up in the coming months”, added Barclays.

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