By Jorge Vazquez
01 Sep 2023, 07:00 AM EDT
Despite the fact that the housing market in the United States is expensive and complicated, buyers are determined to get a second-hand property, because according to data from the National Association of Realtors (NAR), pending home sales increased by 0.9 % in July, marking the second consecutive monthly increase.
The Pending Home Sales Index (PHSI) is a leading indicator for the real estate industry, based on pending sales of existing homes. A sale is considered pending when the contract is signed but the transaction does not close, although the sale is usually finalized within a month or two after signing.
The PHSI rose 0.9% to 77.6 in July. Year-over-year, pending transactions fell 14.0%. An index of 100 is equivalent to the level of contractual activity in 2001.
“The small increase in contract signings shows the potential for further increases in light of the fact that many people have lost multiple home purchase offers,” said Lawrence Yun, NAR chief economist. “Jobs are being created and therefore expanding the pool of potential home buyers. However, rising mortgage rates and limited inventory have temporarily hampered the ability to buy for many.”
According to the NAR report, the Northeast and Midwest posted monthly losses, while sales in the South and West grew. All four US regions experienced year-over-year declines in transactions.
The Northeast PHSI contracted 5.8% from last month to 63.2, a 20.2% decrease from July 2022. The Midwest Index fell 0.4% to 77.5 in July, down 16.0% from a year ago. anus.
The South PHSI increased 2.0% to 95.3 in July, declining 10.9% from a year earlier. The Western Index improved 6.2% in July to 61.3, falling 12.8% from July 2022.
“Interestingly, the western region experienced a significant price drop last year, and as a result, buyers are rapidly returning,” Yun added.
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