The National Association of Realtors (NAR) Thursday morning released its data on pending sales of existing homes for the month of September. The pending home sales index rose by 0.5% from an August reading of 104.1 to a September reading of 104.6. The September index continues to lag year over year, however, down 1% compared with September 2017. September is the first month in the last nine to show even a small increase in pending home sales.
The September pending-sales index increased significantly in two of four NAR geographical regions.
The consensus estimate called for pending sales to be flat month-over-month. 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 47 straight months.
The NAR’s chief economist, Lawrence Yun, noted:
This shows that buyers are out there on the sidelines, waiting to jump in once more inventory becomes available and the price is right.
When compared to the year 2000, when the housing market was considered very healthy, and home sales figures were roughly equivalent and the affordability conditions were much lower compared to now. So even though affordability has been falling recently, the demand for housing should remain steady.
By region, September pending home sales fell to an index score of 92.3 in the Northeast, down 0.4 points compared with August and down 2.7% year over year. In the West, sales increased by 4.5 points to an index score of 93.1, down 7.4% compared to last year’s index.
Sales rose 1.2 points in the Midwest to an index score of 102.4 and remain down 1.1% year over year for the month. Sales in the South decreased by 1.4 points to 119.6 in September and are up 3.3% compared with the year-ago index score.
Existing home sales closed 2017 at around 5.51 million. Last month, the NAR’s Yun said he continued to expect 2018 sales of around 5.46 million (down about 1.6% year over year), unchanged from last month’s estimate. The national median existing home price is expected to rise by around 4.8% this year. For 2019, Yun is forecasting existing home sales to rise 2% and home prices to rise by around 3.5%. In 2017 prices rose 5.7% and sales of existing homes increased by 1.1%. In 2016, sales of existing homes increased by 3.8% and prices rose 5.1%.