U.S. pending home sales race to seven-month high in August By Reuters
WASHINGTON (Reuters) – Contracts to buy U.S. previously owned homes rebounded to a seven-month high in August, but higher prices amid tight supply are slowing the housing market momentum.
According to the National Association of Realtors, its Pending Home Sales Index (based on contracts signed) jumped 8.1% to 119.5 last month. This was the most recent reading since January, and it follows two consecutive monthly drops.
Reuters economists polled had predicted contracts which would become sales in a month or so. In August, the number of pending sales for homes fell 8.3% compared to a year earlier.
The COVID-19 pandemic saw the housing market explode. This was due to a mass exodus of people from urban areas, who worked remotely and took online classes. The pandemic tailwind has waned as workers can return to work with vaccines.
Some first-time buyers are being excluded from the market by expensive homes. NAR reports that in August, the market share for first-time buyers dropped to 2%. Existing home sales dropped last month.
According to Tuesday’s data, consumer attitudes towards purchasing a home declined for the third month straight in September. Also, house prices saw record growth in July over a year.
According to NAR, the South and Midwest region saw the most dramatic increases in pending home sales. These regions have seen house prices rises that are generally less than the rest of the nation. Contracts rose 10.4% in the Midwest, and soared 8.6% to the South. They rose 4.6% and advanced 7.2% respectively in the Northeast, while they grew by 7.2% in West.
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