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58 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Pending Home Sales Decline Nearly 9% From May As escalating mortgage rates and housing prices impacted potential buyers, pending sales retreated in all four major regions, with the West experiencing the largest monthly decline. A ccording to the National Associa- tion of Realtors (NAR), pending home sales decreased in June, following a slight increase in May. All four major regions posted month- over-month and year-over-year pullbacks, the largest of which occurred in the West. The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, dipped 8.6% to 91.0 in June. Year over year, transactions shrank 20.0%. An index of 100 is equal to the level of contract activity in 2001. "Contract signings to buy a home will keep tumbling down as long as mortgage rates keep climbing, as has happened this year to date," NAR Chief Economist Lawrence Yun said. "There are indications that mortgage rates may be topping or very close to a cyclical high in July. If so, pend- ing contracts should also begin to stabilize." According to NAR, buying a home in June was about 80% more expensive than in June 2019. Nearly a quarter of buyers who purchased a home three years ago would be unable to do so now because they no longer earn the qualifying income to buy a median-priced home today. "Home sales will be down by 13% in 2022, according to our latest projection," Yun added. "With mortgage rates expected to stabilize near 6% and steady job creation, home sales should start to rise by early 2023." Pending home sales declined 8.6% from May as escalating mortgage rates and housing prices impacted potential buyers. Pending sales also retreated in all four major regions, with the West experiencing the largest monthly decline. Compared to the previous year, contract signings dropped by double digits in each region as pending sales in the West were down by nearly a third. The Northeast PHSI slid 6.7% compared to last month to 80.9, down 17.6% from June 2021. The Midwest index dropped 3.8% to 93.7 in June, a 13.4% decline from a year ago. The South PHSI slipped 8.9% to 108.3 in June, a decrease of 19.2% from the previous year. The West index slumped 15.9% in June to 68.7, down 30.9% from June 2021. Lower-Income Households Forgoing Home Repairs A study by the Joint Center for Housing Studies of Harvard University revealed that many cities offer repair assistance programs but may be hampered by insufficient budgets. A recent study conducted by the Joint Center for Housing Studies of Harvard University's Remodel- ing Futures Program found lower- income homeowners rely on the assistance of municipal home repair programs for criti- cal repairs. These include repairs that are emergency, structural, plumbing, electrical, mechanical, and replacement needs. The Center reported that most of the largest cities in the United States offer grants or loans to lower-income homeowners who may be unable to make these repairs. An additional report found that a large share of homeowners, many of which are low- er-income, make fewer home repairs compared to higher-income owners. The analysis found that 30% of lower-income homeowners—those who make less than $32,000 annually and rep- resent 48 million households—spent nothing on home maintenance in 2019. The Center received data on 113 programs in the 100 largest U.S. cities during fall 2021 and winter 2022 and found half of the cities surveyed had home repair loan programs, and nearly a third had grant programs. While 62 programs reported sources of program funding, two-thirds rely on federal funding as their primary source, with 21% of programs receiving a portion of funding from local sources, and 6% funded by private or state entities. Thirty-six percent of the 25 programs reporting a budget have an annual budget of less than $500,000. These cities include Buffalo, New York; North Las Vegas; and Richmond, Virginia. Twenty-four percent have a budget between $500,000 and $1 million, including Kansas City, Missouri; St. Paul, Minnesota; and Virginia Beach, Virginia. Dallas; Los Angeles; and San Jose, California, are among the 40% of cities have a program with budgets of more than $1 million. The Center reported that of the 59 pro- grams, 15% offer maximum assistance less than $5,000 for critical repairs. Thirty-percent offer funding between $5,000 and $19,999, and another 34% offer assistance between $20,000 and $49,000. Twenty-one percent offer at least $50,000 for assistance. Eighty percent offer maxi- mum funding of less than $20,000. Sixty-nine percent of programs offer maximum funding levels of $20,000 or more.