Pending home sales see slight rise
Pending homes sales saw a slight rise in September, the National Association of Realtors (NAR) reported today.
The Pending Home Sales Index (PHSI) increased 0.5% in September to 104.6 in September from 104.1 in August. However, year-over-year, contract signings dropped 1% make this the 9th straight month of annual decreases, the NAR said.
But the latest report could indicate a stabilizing trend despite year-over-year declines.
“This shows that buyers are out there on the sidelines, waiting to jump in once more inventory becomes available and the price is right,” said Lawrence Yun, chief economist of the NAR.
A lack of inventory of moderately priced homes and affordability continue to restrain the housing market but when viewed through the lens of the last few decades, the current affordability climate is still favorable, according to Yun.
“When compared to the year 2000, when the housing market was considered very healthy, and home sales figures were roughly equivalent and the affordability conditions were much lower compared to now. So even though affordability has been falling recently, the demand for housing should remain steady,” noted Yun who describes the general condition of the economy as “excellent.”
“Home prices are still rising, so people who are purchasing are still seeing wealth gains,” he said.
Regionally, the PHSI in the Northeast dropped 0.4% to 92.3 in September, and is now 2.7% below a year ago. In the Midwest, the index rose 1.2% to 102.4 in September and is 1.1% lower than September 2017.
Pending home sales in the South fell 1.4% to an index of 119.6 in September but the latest figure is 3.3% higher than a year ago. The index in the West increased 4.5% in September to 93.1 but plunged 7.4% percent below a year ago.
The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The Pending Home Sales Index (PHSI) increased 0.5% in September to 104.6 in September from 104.1 in August. However, year-over-year, contract signings dropped 1% make this the 9th straight month of annual decreases, the NAR said.
But the latest report could indicate a stabilizing trend despite year-over-year declines.
“This shows that buyers are out there on the sidelines, waiting to jump in once more inventory becomes available and the price is right,” said Lawrence Yun, chief economist of the NAR.
A lack of inventory of moderately priced homes and affordability continue to restrain the housing market but when viewed through the lens of the last few decades, the current affordability climate is still favorable, according to Yun.
“When compared to the year 2000, when the housing market was considered very healthy, and home sales figures were roughly equivalent and the affordability conditions were much lower compared to now. So even though affordability has been falling recently, the demand for housing should remain steady,” noted Yun who describes the general condition of the economy as “excellent.”
“Home prices are still rising, so people who are purchasing are still seeing wealth gains,” he said.
Regionally, the PHSI in the Northeast dropped 0.4% to 92.3 in September, and is now 2.7% below a year ago. In the Midwest, the index rose 1.2% to 102.4 in September and is 1.1% lower than September 2017.
Pending home sales in the South fell 1.4% to an index of 119.6 in September but the latest figure is 3.3% higher than a year ago. The index in the West increased 4.5% in September to 93.1 but plunged 7.4% percent below a year ago.
The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.