On Wednesday (9-29-21), the National Association of Realtors® (NAR) reported their Pending Homes Sales Index (PHSI) — which is based on signed real estate contracts, not actual closings, for existing single-family homes, condos, and co-ops — increased of 8.1% in August 2021 to a reading of 119.5. An index of 100 is equal to the level of contract activity in 2001. The August increase brought to an end two consecutive months of declines. Contract signings increased in all regions from July, with the South and Midwest taking the lead. Year-over-year contract signings declined -8.3%.
In remarks prepared for the release of the August PHSI, Lawrence Yun, NAR’s chief economist said, “Rising inventory and moderating price conditions are bringing buyers back to the market. Affordability, however, remains challenging as home price gains are roughly three times wage growth.” According to Yun, such an imbalance in the market is unsustainable over the long-term.
Yun added, “The more moderately priced regions of the South and Midwest are experiencing stronger signing of contracts to buy, which is not surprising. This can be attributed to some employees who have the flexibility to work from anywhere, as they choose to reside in more affordable places.”
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Pending Home Sales Recover 8.1% in August