An increase in pending sales points to some improvement in the housing market
Sept. 27, 2024
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Pending home sales have improved slightly month-over-month.
Despite earlier reports of lagging home sales, pending home sales in August appear to have improved slightly, increasing by 0.6%, according to a recent report from the National Association of Realtors. Most regions of the U.S. saw a monthly increase in pending sales, with just the Northeast seeing a decline in sales. However, on a year-over-year basis, only the Western U.S. saw an improvement in pending sales.
The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – increased to 70.6 in August. Year over year, pending transactions were down 3.0%. An index of 100 is equal to the level of contract activity in 2001.
“A slight upward turn reflects a modest improvement in housing affordability, primarily because mortgage rates descended to 6.5% in August,” said NAR Chief Economist Lawrence Yun. “However, contract signings remain near cyclical lows even as home prices keep marching to new record highs.”
