by Calculated Risk on 9/28/2022 10:03:00 AM
From the NAR: Pending Home Sales Dropped 2.0% in August
The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, fell 2.0% to 88.4 in August. Year-over-year, pending transactions dwindled by 24.2%. An index of 100 is equal to the level of contract activity in 2001.
“The direction of mortgage rates – upward or downward – is the prime mover for home buying, and decade-high rates have deeply cut into contract signings,” said NAR Chief Economist Lawrence Yun. “If mortgage rates moderate and the economy continues adding jobs, then home buying should also stabilize.”
The Northeast PHSI decreased 3.4% from last month to 76.6, down 19.0% from August 2021. The Midwest index fell 5.2% to 88.4 in August, a 21.1% drop from the previous year.
The South PHSI slid 0.9% to 105.4 in August, a decline of 24.2% from a year ago. The West index rose by 1.4% in August to 71.0, down 31.3% from August 2021.
This was a larger decline than expected for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in September and October.