by Calculated Risk on 9/28/2022 10:03:00 AM

From the NAR: Pending Home Sales Dropped 2.0% in August

Pending home sales sagged for the third straight month in August, according to the National Association of REALTORS®. Three out of four major regions experienced month-over-month decreases in transactions, however, the West saw a modest gain. Year-over-year, all four regions posted double-digit declines.

The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, fell 2.0% to 88.4 in August. Year-over-year, pending transactions dwindled by 24.2%. An index of 100 is equal to the level of contract activity in 2001.

"The direction of mortgage rates – upward or downward – is the prime mover for home buying, and decade-high rates have deeply cut into contract signings," said NAR Chief Economist Lawrence Yun. "If mortgage rates moderate and the economy continues adding jobs, then home buying should also stabilize."
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The Northeast PHSI decreased 3.4% from last month to 76.6, down 19.0% from August 2021. The Midwest index fell 5.2% to 88.4 in August, a 21.1% drop from the previous year.

The South PHSI slid 0.9% to 105.4 in August, a decline of 24.2% from a year ago. The West index rose by 1.4% in August to 71.0, down 31.3% from August 2021.
emphasis added

This was a larger decline than expected for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in September and October.