First, watch the video above. It’s my doppelganger Lawrence Yun, Chief Economist at NAR, explaining the 1.4% drop in June pending home sales. This comes on the heels of bad news about June released several days ago:
And predictably, the media and various pundits are all over these three bad news bears.
I’m more interested, however, in one small fact that Lawrence brings out in the video above:
Lawrence Yun, NAR chief economist, said inventory shortages are a factor. “Buyer interest remains strong but fewer home listings mean fewer contract signing opportunities,” Yun said. “We’ve been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors.” (Emphasis mine.)
He later says, “Buyer interest remains exceptionally strong,” and says there’s pent-up demand with all the renters out there today. He blames low inventory levels due to banks holding back REO’s from the market.
Can we delve a bit into this “strong buyer interest” piece?