Pending home sales inched up 0.6% in August compared with July but were down 3% compared with August 2023, according to the National Association of Realtors (NAR).
“A slight upward turn reflects a modest improvement in housing affordability, primarily because mortgage rates descended to 6.5 percent in August,” says Lawrence Yun, chief economist for NAR, in a statement. “However, contract signings remain near cyclical lows even as home prices keep marching to new record highs.”
Month-over-month, pending home increased 3.2% in the Midwest, 3.2% in the West and 0.1% in the South. Pending home sales decreased 4.6% in the Northeast.
Year-over-year, pending home sales decreased 2.2% in the Northeast, 3.6% in the Midwest and 5.3% in the South but were up 2.7% in the West.
“In terms of home sales and prices, the New England region has performed relatively better than other regions in recent months,” Yun says. “Contract signings rose in both the most affordable and most expensive regions – the Midwest and West, respectively – because mortgage rates have fallen nationally. Housing affordability will continue to see notable improvements.”
“The Federal Reserve does not directly control mortgage rates, but the anticipation of more short-term interest rate cuts has pushed long-term mortgage rates down to near 6 percent in late September,” Yun adds. “On a typical $300,000 mortgage, that translates to approximately $300 per month in mortgage payment savings compared to a few months ago.”
Photo: Breno Assis