The National Association of Realtors’ (NAR) Pending Home Sales Index for August was 88.6, which is on par with last year’s pending home sales average for the year, according to NAR’s chief economist, Lawrence Yun.
Yun says the increase in jobs since last year, rising rents, and a higher stock market than one year ago are all improving factors that should lead to more home purchases. “[W]e should be seeing existing-home sales closer to 5.5 million, but are expecting just over 4.9 million this year,” Yun states.
“We continue to experience a pattern in which financially qualified home buyers, willing to stay well within their means, are being denied credit – a factor in elevated levels of contract failures,” he said.
On a monthly basis, pending home sales fell 1.2 percent in August, although existing home sales in August rose 7.7 percent on a monthly basis and 18.6 percent year-over-year.
The pending home sales index is a forward-looking index measuring contract signings but not closings.
The South was the only region to post an increase for the month, rising 2.6 percent over the month to 96.9. The South’s pending home sales rate in August was 7.6 percent higher than in August 2010.
At the other end of the spectrum, the Northeast experienced the greatest decline in pending home sales, which Yun attributes to Hurricane Irene. Contract signings in the region fell 5.8 percent to 63.6 in August but remain 1.3 percent higher than last year.
The next greatest decline was seen in the Midwest with a 3.7 percent decline to a rate of 76.2 in August. This, however, is 8.2 percent higher than the region’s rate in August 2010.
Lastly, contract signings in the West fell 2.4 percent in August arriving at 108.1. Compared to other regions, the West has shown the greatest increase since last year. August’s rate is 10.5 percent higher than last year.
Krista Franks | DSNews.com | September 29, 2011