Pending home sales decreased 1.4% in August but were 6.1% above August 2014, now having risen for 12 consecutive months year over year, according to the National Association of Realtors' (NAR) Pending Home Sales Index.
According to the index, a modest increase in the West was offset by declines in all other regions.
Pending home sales in the Northeast fell 5.6% in August but are still 8.9% above one year ago. Sales in the Midwest saw a slight decrease of 0.4% in August but are now 6.5% above August 2014. Sales in the South decreased 2.2% but are 4.1% above last August.
On the other hand, the index in the West demonstrated a 1.8% increase in August and is now 7.6% above one year ago.
Lawrence Yun, chief economist and senior vice president of research for NAR, says that even with the modest decline in contract signings, demand continues to outpace the housing supply and increase price growth in many markets. ‘Pending sales have leveled off since mid-summer, with buyers being bounded by rising prices and few available and affordable properties within their budget,’ he says.
‘Even with existing-housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago,’ Yun adds.
According to Yun, sales in the next few months should be able to maintain the current pace, but he warns that there are a few upcoming ‘speed bumps’ that may potentially impact housing.
‘The possibility of a government shutdown and any ongoing instability in the equity markets could cause some households to put off buying for the time being. Furthermore, adapting to the changes being implemented next month in the mortgage closing process could delay some sales.’
NAR forecasts that the national median existing-home price will increase 5.8% this year to reach $220,300.
Total existing-home sales this year are forecast to increase 7% to reach approximately 5.28 million, which is about 25% below the prior peak set in 2005, according to NAR.