Despite a modest decline in contract signings in August, pending home sales showed a year-over-year gain of 6.2%, according to a report released this week by the National Association of Realtors (NAR). This marks the 12th consecutive month of year-over-year gains.
NAR Chief Economist Lawrence Yun says demand is still outpacing supply, and that’s spurring price growth in many housing markets. “Pending sales have leveled off since mid–summer, with buyers being bounded by rising prices and few available and affordable properties within their budget,” he said. “Even with existing–housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago.”
Sales in the coming months are expected to mostly maintain their current pace, according to Yun.
The national median existing-home price is projected to rise 5.8 percent this year to $220,300. Yun predicts total existing-home sales this year will increase 7.0 percent to around 5.28 million. That’s about 25% below the prior peak set in 2005 of 7.08 million.
The bottom line? Overall, the housing market is still trending very strongly, hampered only by a shortage of quality inventory in some specific price points.
This Week’s Mortgage Rate Summary:
- Rates Currently Trending: NEUTRAL
- Weekly Rate Forecast: NEUTRAL
- This Week’s Potential Volatility: HIGH