Pending Home Sales Up 1.6% in August
Washington, DC, September 26, 2019-The Pending Home Sales Index climbed 1.6% to 107.3 in August, reversing the prior month’s decrease, according to the National Association of Realtors. Year-over-year contract signings jumped 2.5%. An index of 100 is equal to the average level of contract activity.
“It is very encouraging that buyers are responding to exceptionally low interest rates,” said Lawrence Yun, NAR chief economist. “The notable sales slump in the West region over recent years appears to be over. Rising demand will reaccelerate home price appreciation in the absence of more supply.”
All regional indices are up from July, with the highest gain in the West region. The PHSI in the Northeast rose 1.4% to 94.3 in August and is now 0.7% higher than a year ago. In the Midwest, the index increased 0.6% to 101.7 in August, 0.2% higher than August 2018.
Pending home sales in the South increased 1.4% to an index of 124.4 in August, a 1.8% bump from last August. The index in the West grew 3.1% in August 2019 to 96.4, an increase of 8.0% from a year ago.
Yun noted that historically low interest rates will affect economic growth, especially home buying, going forward.
“With interest rates expected to remain low, home sales are forecasted to rise in the coming months and into 2020,” said Yun. “Unfortunately, so far in 2019, new home construction is down 2.0%. The hope is that housing starts quickly move into higher gear to meet the higher demand. Moreover, broader economic growth will strengthen from increased housing activity.”