After two months of declines, pending home sales swung to positive territory in June, rising 4.8% from May as housing inventory increased and mortgage rates declined, the National Association of REALTORS® (NAR) said, citing its Pending Home Sales Index.         

Pending sales, in which the contract has been signed but the transaction has not closed, are considered a leading indicator and generally precede existing-home sales by a month or two. Year over year, sales were down 2.6%.    

“The rise in housing inventory is beginning to lead to more contract signings,” NAR Chief Economist Lawrence Yun said in a press release. “Multiple offers are less intense, and buyers are in a more favorable position.” 

Regionally, pending sales were up in all four U.S. regions on a monthly basis, while they were down on a yearly one in the Northeast, South and Midwest and up in the West. 

“Purchase mortgage applications, another leading indicator of sales activity, also picked up in June, but have since slid in July,” First American Deputy Chief Economist Odeta Kushi said in a statement. “Buyers are still feeling very cautious, and affordability remains constrained. Mortgage rates remain in the high 6’s and house prices continue to reach new heights nationally. The payment-to-paycheck calculation still doesn’t pencil out for a lot of buyers.”