Pending home sales tumble in August

According to the index, a modest increase in the West was offset by declines in all other regions.

The PHSI in the Northeast fell 5.6 percent to 93.3 in August, but is still 8.9 percent above a year ago.

Pending home sales in the South declined 2.2% to an index of 121.5 in August but are still 4.1% above last August.

Nationally, pending sales rose 6.1 percent from a year ago, but slipped 1.4 percent from July, according to the National Association of Realtors.

Despite the decrease, demand continues to outpace housing supply and elevate price growth in markets across the country, said Lawrence Yun, NAR chief economist, in a statement.

NAR said it expected pending sales maintain their current pace but warned of looming threats, including the potential shutdown of the federal government in coming days amid a budget battle in Congress. “Furthermore, adapting to the changes being implemented next month in the mortgage closing process could delay some sales”. The median existing single family home price was $230,200 in August, up 5.1% from August 2014. Total existing-home sales this year are forecast to increase 7% to around 5.28 million, about 25% below the prior peak set in 2005 (7.08 million), and down from a total of 5.29 million projected in July.

It was only the second time this year that NAR’s pending home sales index had fallen month-on-month, after a drop in June.

Sales rose by 1.8% in the West to 104.9, and they are now up 7.6% compared with August 2014.

Following three straight months of gains, existing home sales in the United States dipped in August despite slowing price growth and a positive turnaround in the share of sales to first time buyers. A lag of a month or two usually exists between a contract and a completed sale. An index reading of 100 equals the average contract activity level in 2001.