July’s rebound short-lived as pending sales fall

Pending home sales dipped in August again after a mild resurgence in July, but still held over last August for the twelfth consecutive month of year-over-year gains, according to a report released by the National Association of Realtors.

The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, decreased by 1.4 percent to 109.4 in August from 110.9 in July, but is still 6.1 percent above August 2014 (103.1).

Regional Pending Home Sales

The PHSI in the Northeast fell 5.6 percent to 93.3 in August, but even with this large dip, it’s still 8.9 percent above a year ago. The Midwest index dropped 0.4 percent to 107.4, and is still 6.5 percent above August 2014.

In the South, the PHSI declined 2.2 percent to 121.5, but that is still 4.1 percent above last year. The West defied the national trend and saw a 1.8 percent increase to 104.9, or 7.6 percent above a year ago.

Short-Term Roadblocks

Lawrence Yun, NAR’s chief economist, cited some of the short term roadblocks potentially stifling sales.

“The possibility of a government shutdown and any ongoing instability in the equity markets could cause some households to put off buying for the time being,” Yun said. “Furthermore, adapting to the changes being implemented next month in the mortgage closing process could delay some sales.”