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Pending home sales retreat a bit in Aug.

WASHINGTON – Sept. 28, 2015 – Pending home sales retreated in August month-to-month, but the number of homes under contract is still at a healthy level, and the latest report marks 12 months of higher numbers in a year-to-year comparison, according to the National Association of Realtors® (NAR).
The Pending Home Sales Index, a forward-looking indicator based on contract signings, decreased 1.4 percent to 109.4 in August from 110.9 in July; But it’s still 6.1 percent above August 2014 (103.1). A modest increase in the West was offset by declines in all other regions.
“Pending sales have leveled off since mid-summer, with buyers being bounded by rising prices and few available and affordable properties within their budget,” says Lawrence Yun, NAR chief economist. “Even with existing-housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago.”
According to Yun, sales in the coming months should be able to roughly maintain their current pace. However, he warns that there are looming speed bumps that have the potential to impact housing.
“The possibility of a government shutdown and any ongoing instability in the equity markets could cause some households to put off buying for the time being,” says Yun. “Furthermore, adapting to the changes being implemented next month (Oct. 3) in the mortgage closing process could delay some sales.”
The national median existing-home price is expected to increase 5.8 percent in 2015 to $220,300. Yun forecasts total existing-home sales this year to increase 7.0 percent to around 5.28 million, about 25 percent below the prior peak set in 2005 (7.08 million).
The pending index in the Northeast fell 5.6 percent to 93.3 in August, but it’s still 8.9 percent above a year ago. In the Midwest, the index inched down 0.4 percent to 107.4 in August, and is now 6.5 percent above August 2014.
Pending home sales in the South declined 2.2 percent to an index of 121.5 in August, but they’re still 4.1 percent above last August. The index in the West rose 1.8 percent in August to 104.9, and is now 7.6 percent above a year ago.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.
© 2015 Florida Realtors®
Source: Florida Realtors Feed

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