Pending Home Sales up 7.4%
Pending sales of existing U.S. homes unexpectedly rose in August to the highest gain in over a year, this is according to data from the National Association of Realtors. The NAR Pending Home Sales Index, based on written purchase & sale contracts, rose 7.4 percent in August to 93.4 on pent-up demand as affordability improved.
Most of the recent turmoil in the national & global financial markets have escalated since the August pendings, so I’m sure that number will actually have to be revised depending on how many pendings fail to close.
August’s reading was 8.8 percent higher than a year earlier and was the highest since 101.4 in June 2007. Economists in a recent poll had expected sales to drop by 1.8 percent.
“What we’re seeing is the momentum of people taking advantage of low home prices,” NAR’s senior economist Lawrence Yun said in a statement.“Home buyers in July were hampered by overly stringent lending criteria in the months before the government takeover of Fannie and Freddie,” in early September, he said. “August shows some unleashing of pent-up demand before the credit crisis accelerated in September.” Pending home sales gained across all regions in August: up 18.4 percent in the West, 8.4 percent in the Northeast, 3.6 percent in the Midwest and 2.3 percent in the South.
However, I’m wondering if this is really a sign of where this market is going or not, because some of those numbers are foreclosed homes at bargain prices upping the numbers. In my area of Bellingham, WA I’m personally not seeing a lot of foreclosures, but they are out there certainly. It’s been said that Housing at first impacted the economy and the economy is now impacting housing in a vicious cycle.
The NAR is also forecasting that U.S. existing home sales will be at 5.04 million this year, rising to 5.41 million in 2009, and new home sales of 503,000, falling to 471,000 next year. Housing starts, including multifamily units, should drop 28.2 percent to 973,000 units this year, and fall further to 843,000 in 2009 as builders clear their current inventory.
Jerry Campbell - Muljat Group - Bellingham Real Estate