WASHINGTON – Fewer Americans signed contracts to purchase homes in May, as sales are being stifled by a shortage of properties on the market.
The National Association of Realtors said Wednesday that its pending home sales index slipped 0.5 percent last month to 105.9, the second straight monthly decline. On a yearly basis, pending home sales have fallen 2.2 percent.
Would-be buyers are increasingly frustrated by a lack of homes listed for sale. The number of homes on the market has dropped 6.1 percent over the past year to 1.85 million. The worsening shortage has prevented home-buying even as a strong job market has buoyed demand. People shopping for homes are finding that average prices are climbing faster than wages while higher mortgage rates are making it more expensive to borrow.
May's decline came entirely from a drop-off in the South, while purchases increased on a seasonally adjusted basis in the Northeast, Midwest and West.
Pending sales are a barometer of home purchases that are completed a month or two later. In May, completed sales of existing homes fell 0.4 percent.