Americans signed fewer contracts to buy homes in May, the third straight monthly decline and evidence that a shortage of homes for sale has suppressed home-buying.
The National Association of Realtors said Wednesday that its pending home sales index fell 0.8 percent in May to 108.5. That’s down from 109.4 in April and 111.3 in March. The index has slipped 1.7 percent over the past 12 months.
Would-be buyers are facing higher prices and fewer options. Sales listings have plunged 8.4 percent over the past 12 months to 1.96 million. The median sales price in May rose 5.8 percent from a year ago to $252,800.
Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed. The steady decline suggests that homes sales growth is increasingly limited, though demand and mortgage applications indicate that sales should be stronger than last year.
“Today’s reading signals a small dip in June existing home sales, but they don’t change the big picture,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
The measure of signed contracts in May fell in the Northeast, South and West. It remained unchanged in the Midwest.