US Pending Home Sales Down, New Home Sales Up in August
While economists anticipated a decline in U.S. pending home sales in August, many were surprised to see the extent at which the sales fell. On Sept. 27, Reuters reported the sale of previously-owned homes dropped 1.8%, compared to the predicted 0.4%, based on the National Association of Realtors' (NAR) Pending Home Sales Index.Pending home sales have fallen four times in the past five months, Reuters states, the most recent decline attributed to inventory shortage and price increases. The West saw the highest decrease in contracts at nearly 6%, followed by a little more than 1% in the Northeast and approximately half percent in both the Midwest and the South.
"With prices having risen so quickly, many consumers were deciding to wait to list their homes hoping to see additional price and equity gains," NAR Chief Economist Lawrence Yun said in a statement.
In a further analysis of the NAR index, the National Association of Home Builders (NAHB) states pending home sales are down 2.3% year-over-year (YOY). Despite the continuously dwindling results of pending home sales, new homes sales rose 3.5% month-over-month (MoM) as well as 6.9% YOY, as reported by NAHB based on data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
Nearly half of new home sales occurred in the Northeast, with lower numbers throughout the rest of the country. NAHB Chairman Randy Noel said in the article that "positive demographics and a strong overall economy" led to rising new home sales.
"However, housing affordability remains a serious concern and builders must manage supply-side costs and stiff regulatory hurdles to keep prices competitive," Noel added.
—Andrew Michaels, editorial associate