After two straight months of declines, pending home sales bounced back to beat projections in August.
Pending Home Sales jumped +8.1% in August
All four regions of the country posted monthly gains in pending home sales during the month of August, according to the National Association of REALTORS• (NAR) Pending Home Sales Index (PHSI).
The PHSI bounced up to 119.5 in August, an increase of +8.1% from July and up 6.3% from June though still off -8.3% year-over-year.
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Affordability More of a Challenge Due to Home Price Growth
This bump in pending home sales came to light at the same time that the S&P CoreLogic Case-Shiller released its report on July’s home price growth going through the roof, +19.7%, to growth levels not seen since 1987. Such flying-high prices make affordability a huge challenge for many otherwise potential buyers.
Lawrence Yun, NAR’s Chief Economist, said, “Affordability…remains challenging as home price gains are roughly three times growth.”
Realtor.com’s manager of economic research George Ratiu said, “Buyers ran into headwinds, as a 10-basis point increase in average mortgage rates combined with double-digit price gains to blunt affordability.”
Southern and Midwestern Regions Saw Strongest Gains in Pending Home Sales in August
NAR’s Yun pointed out that the country’s more affordable regional markets, the South and the Midwest, saw the strongest gains in pending home sales in the midst of almost startling home price gains across the country.
Yun said, “The more moderately priced regions of the South and the Midwest are experiencing stronger signing of contracts to buy, which is not surprising. This can be attributed to some employees who have the flexibility to work from anywhere, as they choose to reside in more affordable places.”
PHSI Gains by Region
- Midwest – +10.4% in August 2021
- -5.9% from August 2020
- South – +8.6% in August 2021
- -6.3% from August 2020
- West – +7.2% in August 2021
- -9.2% from August 2020
- Northeast +4.6% in August 2021
- – -15.8% from August 2020
Thanks to the National Association of REALTORS®.