Signed contracts to purchase existing homes declined for a third consecutive month in August according to the National Association of Realtors® (NAR) Pending Home Sales Index (PHSI).
The future contract signings indicator fell by 1.6 percent to 107.7 in August from 109.5 in July but was still 5.8 percent higher than in August of last year when the Index was at 101.8. It was the third consecutive month that the Index has fallen.
In May of this year, the Index had reached its highest level in over six years but has been on the decline since then.
Lawrence Yun, chief economist of NAR, stated, “Sharply rising mortgage interest rates in the spring motivated buyers to make purchase decisions, culminating in a six-and-a-half-year peak for sales that were finalized last month. Moving forward, we expect lower levels of existing-home sales, but tight inventory in many markets will continue to push up home prices in the months ahead.”
Three of the four regions in the Index posted declines in their monthly level of sales contract activity, while all four regions reported a higher level of contract signings when compared to a year ago.
The South posted the largest monthly decline, falling 3.5 percent from the previous month while the West followed with a decline of 1.7 percent.
The Midwest suffered the smallest decline of 1.4 percent while the Northeast reported the only increase of 4.0 percent.
The Midwest reported the largest increase in contract signings compared to August of last year with a 13.8 percent increase followed by the Northeast which reported a gain of 5.1 percent while the South and the West reported annual increases of 3.7 percent and 1.7 percent, respectively.
The PHSI is a forward looking indicator which generally indicates closings one to two months in the future.
Tags: pending home sales, existing home sales, contract signings
National Association of Realtors
Reported by Chris Moore