Existing and pending home sales reported by the National Association of Realtors. Photo: Reuters)
The Pending Home Sales Index (PHSI) conducted by the National Association of Realtors rose by just 0.1% in October, missing the 0.2% forecast. The PHSI, which reports on contracts to buy previously-owned homes, inched higher to 110.0 in October from a slight downward revision of 109.9 in September.
“Most of the country last month saw at least a small increase in contract signings and more notably, activity in all four major regions is up from a year ago,” Lawrence Yun, NAR chief economist said. “Despite limited listings and steadfast price growth that’s now carried into the fall, buyer demand has remained strong because of the consistently reliable job creation in a majority of metro areas.”
Regionally, in the Northeast the PHSI slugged along at 0.4% to 96.9 in October, though is now 3.9% above a year ago. In the Midwest, it rose 1.6% to 106.3 and is now 1.2% above the level measured in October 2015.
In the South, pending home sales fell 1.3% to 120.1 but are still 0.8% above last October. Finally, the index in the West increased slightly by 0.7% to 108.3 and is 2.5% above a year ago.
Overall, the PHSI is now 1.8% higher than last October (108.1) and Mr. Yun expects existing sales at the end of 2016 to clock in at a pace of roughly 5.36 million. That surpasses 2015 (5.25 million) and would be the highest since 2006 (6.48 million).
“Low supply has kept prices elevated all year and has put pressure on the budgets of buyers,” Mr. Yun added. “With mortgage rates expected to rise into next year and put added strain on affordability, sales expansion will be contingent on more inventory coming onto the market and continued job gains.”
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