WASHINGTON – Pending home sales rebounded in August, recording significant gains after two prior months of declines, according to the National Association of Realtors® (NAR).
Each of the four major U.S. regions tracked by NAR mounted month-over-month growth in contract activity. However, each territory was also down in year-to-year pending-sale comparisons, with the Northeast down a double-digit 15.8%. In contrast, the South – which includes Florida – was down only 6.3%
The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – increased 8.1% to 119.5 in August. Year-over-year, signings dipped almost the same amount, 8.3%. An index of 100 is equal to the level of contract activity in 2001.
“Rising inventory and moderating price conditions are bringing buyers back to the market,” says Lawrence Yun, NAR’s chief economist. “Affordability, however, remains challenging as home price gains are roughly three times wage growth.”
Such an imbalance in the market is unsustainable over the long-term, Yun says.
“The more moderately priced regions of the South and Midwest are experiencing stronger signing of contracts to buy, which is not surprising,” Yun adds. “This can be attributed to some employees who have the flexibility to work from anywhere, as they choose to reside in more affordable places.”
Realtor.com’s Hottest Housing Markets data revealed that out of the largest 40 metros, the most improved metros over the past year, as of September 27, were Orlando-Kissimmee-Sanford, Fla.; Tampa-St. Petersburg-Clearwater, Fla.; Nashville-Davidson-Murfreesboro-Franklin, Tenn.; Jacksonville, Fla.; and Austin-Round Rock, Texas.
August pending home sales regional breakdown: Month-over-month, the Northeast PHSI rose 4.6% to 96.2 in August, a 15.8% drop from a year ago. In the Midwest, the index climbed 10.4% to 115.4 month-to-month, but was down 5.9% year-to-year.
Pending home sales in the South increased 8.6% to an index of 141.8 in August, down 6.3% from August 2020. The index in the West grew 7.2% in August to 107.0, but it was still down 9.2% year-to-year.
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