The National Association of Realtors’ Pending Home Sales Index measures the number of contracts signed to buy homes each month. Because it measures contract signings – and not closings – it is a good indicator of future home sales. In August, the index fell 1.4 percent. Despite the dip, however, it remains 6.1 percent above last year’s level and has now risen over year-before levels for 12 consecutive months. Lawrence Yun, NAR’s chief economist said, even with the slight decline, demand is outpacing housing supply, which will continue to put upward pressure on home prices. “Pending sales have leveled off since mid-summer, with buyers being bounded by rising prices and few available and affordable properties within their budget,” Yun said. “Even with existing-housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago.” In other words, despite a slightly more challenging environment for buyers, demand is still healthy. In fact, a closer look at the numbers reveals that pending home sales were actually up in the West and unchanged from last month in the Midwest. Which means, August’s declines were confined to the South and Northeast. More here.
