Pending Home Sales Edge Up

(Illustration courtesy of the National Association of Realtors)

Pending home sales rose 0.6% in August, according to the National Association of Realtors.

The NAR Pending Home Sales Index – a forward-looking indicator of home sales based on contract signings – increased to 70.6 in August. An index of 100 is equal to the level of contract activity in 2001.

Year over year, pending transactions were down 3.0%.

“A slight upward turn reflects a modest improvement in housing affordability, primarily because mortgage rates descended to 6.5% in August,” NAR Chief Economist Lawrence Yun said. “However, contract signings remain near cyclical lows even as home prices keep marching to new record highs.”

Yun noted the Federal Reserve does not directly control mortgage rates, “but the anticipation of more short-term interest rate cuts has pushed long-term mortgage rates down to near 6% in late September,” he said. “On a typical $300,000 mortgage, that translates to approximately $300 per month in mortgage payment savings compared to a few months ago.”