Numbers: The number of home buyers who signed a home purchase contract in August has jumped, far exceeding economists’ expectations.
Pending home sales rose 8.1% in August from July, the National Association of Realtors reported on Wednesday. Economists polled by MarketWatch had forecast a 0.4% increase in pending home sales in August.
Still, compared to a year ago, pending sales were down 8.3%, reflecting how much home buying activity has fallen after the summer and fall boom. last.
The Pending Home Sales Index measures real estate transactions for which a contract was signed for a home from a previous owner, but the sale had not yet been completed, and it is compared to the signing activity contracts in 2001. The index gives an overview of the direction the sales figures of existing homes will take in the coming months, which are based on closed transactions.
““Increasing stocks and moderating pricing conditions are bringing buyers back to the market.”“
“Rising inventories and moderating pricing conditions are bringing buyers back into the market,” Lawrence Yun, chief economist for the National Association of Realtors, said in the report. “Affordability, however, remains difficult, as house price increases are about three times greater than wage growth. “
Each region saw its home sales increase on a monthly basis, driven by a 10.4% gain in the Midwest.
The big picture: The surge in pending home sales in August underscores how optimistic there is to be about the outlook for the housing market. When it comes to data on mortgage applications, the recent trend has shown signs of stabilizing demand for loans used to purchase homes, despite weekly fluctuations in the data.
Data on mortgage loan applications can often be an indicator of general home sales. But the preponderance of cash buyers in today’s housing market means that data may miss much of the housing demand right now, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics.
“The big picture in the housing market is that demand is picking up somewhat after falling sharply in the first half of the year, likely due to a combination of falling mortgage rates, easier lending standards and – maybe – from a second wave of people heading towards the outskirts of cities when the Delta wave hit, ”Shepherdson said in a research note.
What they say : “Real estate markets are heading for a new equilibrium, as the pandemic frenzy to find a more spacious home in greener suburbs and historically low foreclosure rates has given way to a more tempered search for affordability. Record prices are causing buyers to be more selective, and with monetary tightening expected to push rates higher, buyers are likely to become even more cost conscious, ”said George Ratiu, director of economic research at Realtor .com.