Contract Signings Slow As Summer Season Ends

The number of signed contracts to buy homes fell 1.8 percent in August and are now down 2.3 percent year-over-year. The data, from the National Association of Realtors’ most recent Pending Home Sales Index, shows slower activity from buyers at the end of the summer sales season. However, a closer look at the numbers reveals that most of the decline was in the West, where affordability is more of a concern for buyers. For example, pending sales – which are a good indication of future home sales, since they count signings and not closings – were virtually unchanged in the Midwest, Northeast, and South, but down nearly 6 percent in the West. Still, despite the overall decline, there was some good news in the report. For example, some of the largest increases in active listings were found in markets where additional inventory would help moderate rising prices, like the Seattle-Tacoma-Bellevue area and San Diego-Carlsbad. Additionally, NAR chief economist, Lawrence Yun, says he expects next year to be more favorable for buyers. In fact, he is forecasting a 2 percent increase in sales of previously owned homes and only a 3.5 percent increase in home prices, which is an improvement compared to this year’s nearly 5 percent gain. More here.

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