Tag Archives: Pending Home Sales

What drove the increase of pending home sales in July as they swelled to their second-highest numbers in more than a decade?

Pending home sales returned with a vengeance in March to the highest reading since May 2015, despite inventory deficiencies and rising home prices.

Pending home sales have improved for 18 straight months, but is the news all good?

NAR Chief Economist Lawrence Yun stated that "Unless sizeable supply gains occur for new and existing homes, prices and rents will continue to exceed wages into next year and hamstring a large pool of potential buyers trying to buy a home."

According to the NAR's Pending Home Sales Index (PHSI), contract signings decreased 1.4 percent to 109.4 in August, down from 110.9 in July. However, the index is still 6.1 percent higher that 103.1 recorded in August 2014.

Additionally, the index has increased year-over-year for 11 consecutive months and is the third highest reading of 2015, behind April (111.6) and May (112.3).

Yun expects a rebound heading into the summer, following April’s decline in existing-home sales, but the chance of significant gains will depend on an increase in inventory and evidence of moderating price growth now that interest rates have started to rise.

The index also broke down pending home sales by region. While the South and West saw an increase of 4 percent and 1.7 percent for March, respectively, the Northeast and Midwest saw drops, decreasing by 1.5 percent and 2.5 percent.

"This is a positive sign heading into the spring homebuying season," Freddie Mac wrote on its blog. "This also shows positive momentum in general for the housing market, since this is the fourth consecutive month pending home sales have been up."

Pending home sales declined month-to-month in October but remained higher than they were a year ago, according to the latest Pending Home Sales Index from the National Association of Realtors (NAR).