August pending home sales up 0.6%
Pending home sales this summer were on a rollercoaster, and August seemed to suggest that we’ve entered the station. After June rose 4.8% month-over-month in pending home sales, July dropped a steep 5.5%. August came in at a 0.6% increase, according to the National Association of Realtors® (NAR). The Pending Home Sales Index (PHSI) was 70.6 in August.
Three out of four regions saw declines from July, and pending transactions were down 3.0% from a year ago.
“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.”
Regional breakdown
Three out of the four regions saw improvement from last month in pending home sales. Three out of four saw declines from last year, as well.
“In terms of home sales and prices, the New England region has performed relatively better than other regions in recent months,” Yun said. “Contract signings rose in both the most affordable and most expensive regions – the Midwest and West, respectively – because mortgage rates have fallen nationally. Housing affordability will continue to see notable improvements.”
- Northeast: down 4.6% to 61.6, down 2.2% from August 2023
- Midwest: up 3.2% to 70.0, down 3.6% from August 2023
- South: up 0.1% to 83.6, down 5.3% from August 2023
- West: up 3.2% to 58.0, up 2.7% from August 2023
This report shows a market that’s starting to get more active in August, even if just by a little bit. This is driven by mortgage rates responding to changes in the Federal Reserve’s monetary policy. “The Federal Reserve does not directly control mortgage rates, but the anticipation of more short-term interest rate cuts has pushed long-term mortgage rates down to near 6% in late September,” notes Yun. “On a typical $300,000 mortgage, that translates to approximately $300 per month in mortgage payment savings compared to a few months ago.”
Improvements in affordability may cause more buyers to get into the market this fall. Make sure that you’re ready to compete by starting your home search with PowerBid Approval. And to take advantage of the market conditions where you live, work with a local loan officer.
Source: https://www.nar.realtor/newsroom/pending-home-sales-edged-up-0-6-in-august
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