Pending Home Sales Inch Up In September As Housing Market Normalizes
The number of contracts signed to buy previously-owned homes inched up slightly in September, reaching its second-highest level since August 2013. The numbers are another indicator that the housing market is past the rapid recovery phase and is beginning to normalize.
The Pending Home Sales Index, which tracks contract signings (as opposed to closed sales), rose 0.3% in September to 105.0, the National Association of Realtors said Monday. (An index of 100 represents an 'average' level of contract activity.) September's level missed the 0.8% increase forecast by economists surveyed by Bloomberg ahead of the release.
However, September also marked the first time in 11 months that contract signings were higher-by 1%-than their level one year earlier. Contract for previously-owned homes have been down on a year-over-year basis since September 2013, when rising prices seemed to slow the pace at which Americans were purchasing homes. Now, with price gains slowing and inventory levels easing, buyers appear to be more confident about the market.
'Housing supply for existing homes was up in September 6% from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year,' said Lawrence Yun, NAR's chief economist. 'Additionally, the current spectacularly low mortgage rates should help more buyers reach the market.'
Economists consider NAR's pending home sales report a more timely housing market indicator than others because it is based on contracts signed rather than closed transactions. Closings generally come one to two months after a contract is signed.
On Friday, Commerce data showed October new home sales (closed transactions) about flat with the prior month. Another report last week showed existing (previously-owned) home sales rose 2.4% in September to hit their fastest pace of 2014. Notably, that pace was still down from the level one year earlier. The various housing indicators are moving in different directions because the market has reached an 'inflection point' past the rapid recovery and beginning to normalize, according to Stan Humphries, chief economist at the real estate data firm Zillow.
Pending contracts for existing homes increased in September in the Northeast and South, but fell on a monthly basis in the West and Midwest. All regions of the United States increased contract-signings on a year-over-year basis, with the exception of the Midwest.
Post a Comment for "Pending Home Sales Inch Up In September As Housing Market Normalizes"