The National Association of Realtors (NAR) Wednesday morning released its data on pending sales of existing homes for August. The pending home sales index fell 2.9 points (down 2.6%) to 106.3 from a July reading of 109.1. Pending home sales have now fallen in five of the past six months.
August sales fell in all four NAR geographical regions.
The consensus estimate called for a month-over-month decrease of 0.2% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.
The index has been above 100 (the “average” reading) for 35 straight months.
The NAR’s chief economist, Lawrence Yun, noted:
August was another month of declining contract activity because of the one-two punch of limited listings and home prices rising far above incomes. Demand continues to overwhelm supply in most of the country, and as a result, many would-be buyers from earlier in the year are still in the market for a home, while others have perhaps decided to temporarily postpone their search.
The supply and affordability headwinds would have likely held sales growth just a tad above last year, but coupled with the temporary effects from Hurricanes Harvey and Irma, sales in 2017 now appear will fall slightly below last year. The good news is that nearly all of the missed closings for the remainder of the year will likely show up in 2018, with existing sales forecast to rise 6.9 percent.
By region, August pending home sales decreased by 4.4% to an index score of 93.4 in the Northeast, and down 4.1% compared with August 2016. In the South, sales fell 3.5% to an index score of 118.8, 1.7% below last year’s index.
Sales dropped by 1.0% in the West to an index score of 101.3 and remain down 2.4% year over year for the month. Midwest sales fell by 1.5% to 101.8 in August and are now 3.2% below the year-ago total.