Pending Home Sales Rise 1.1%

(Illustration courtesy of the National Association of Realtors)

Pending home sales rose 1.1% in September, the National Association of Realtors reported Thursday.

The Northeast, Midwest and South posted monthly gains in transactions while the West experienced a loss, the NAR Pending Home Sales Index said.

The report noted all four U.S. regions had year-over-year declines in transactions.

“Despite the slight gain, pending contracts remain at historically low levels due to the highest mortgage rates in 20 years,” NAR Chief Economist Lawrence Yun said. “Furthermore, inventory remains tight, which hinders sales but keeps home prices elevated.”

On a year-over-year basis, pending transactions declined 11%, the report said. An index of 100 is equal to the level of contract activity in 2001.

NAR forecasts existing-home sales will decrease 17.5% in 2023 to 4.15 million before rising 13.5% to 4.71 million in 2024. Compared to last year, national median existing-home prices are projected to remain stable in 2023 – edging higher by 0.1% to $386,700, before increasing by 0.7% next year, to $389,500. Housing starts will drop 10.4% from 2022 to 2023, to 1.39 million, before rising to 1.48 million, or 6.5%, in 2024.

“Because of homebuilders’ ability to create more inventory, new-home sales could be higher this year despite increasing mortgage rates. This underscores the importance of increased inventory in helping to get the overall housing market moving,” Yun said.