From the NAR: Pending Home Sales Tumbled 7.1% in August
Pending home sales slid 7.1% in August, according to the National Association of REALTORS®. All four U.S. regions posted monthly losses and year-over-year declines in transactions.
“Mortgage rates have been rising above 7% since August, which has diminished the pool of home buyers,” said Lawrence Yun, NAR chief economist. “Some would-be home buyers are taking a pause and readjusting their expectations about the location and type of home to better fit their budgets.”
The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – sank 7.1% to 71.8 in August. Year over year, pending transactions fell by 18.7%. An index of 100 is equal to the level of contract activity in 2001.
The Northeast PHSI declined 0.9% from last month to 62.6, a reduction of 18.2% from August 2022. The Midwest index dropped 7.0% to 71.3 in August, down 19.1% from one year ago.
The South PHSI fell 9.1% to 86.5 in August, dipping 17.6% from the prior year. The West index retreated 7.7% in August to 56.3, sinking 21.4% from August 2022.
emphasis addedThis was way below expectations of a 1.0% decrease for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in August and September.