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Pending home sales retreated slightly in August, but they’re still much stronger than they were a year ago, according to the Pending Home Sales Index from the National Association of Realtors®, which measures homes that are under contract but not yet sold.
The index dropped just 1.4% from July to August but still rose for 12 straight months, and August 2015’s numbers were still 6.1% above August 2014. The West—with booming California and Denver markets—saw its numbers increase, but all other regions declined.
“The West posting gains is consistent with the high number of hot markets in the region that continue to show strong demand and fast-moving supply in August and into September,” said Jonathan Smoke, chief economist of realtor.com®. Still, the numbers reported on Monday were a bit of a surprise. “Consensus expectation was for a 0.5% gain over the seasonally adjusted sales rate for July, following a slight gain last month,” he added.
But shed no tears for sellers. “Demand continues to outpace housing supply and elevate price growth in numerous markets,” NAR reported. The national median existing-home price may rise to $220,300 in 2015, a 5.8% hike. The decline in pending home sales is easily explained by the seasonal shift (August is not the hottest time of year for home buying), said Smoke. Another factor: “the effect of investor/foreign buyer dropping.”
So will it pick up?
NAR’s chief economist Lawrence Yun predicts that it will, but it won’t reach pre-bubble heights. Existing-home sales, he said, could rise 7.0% to around 5.28 million; that’s still 25% below 7.08 million, the 2005 peak.
Regional breakdown:
Northeast: down 5.6% to 93.3 in August, 8.9% above a year ago
Midwest: down 0.4% to 107.4 in August, 6.5% above a year ago
South: down 2.2% to 121.5 in August, 4.1% above a year ago
West: up 1.8% to 104.9 in August, 7.6% above a year ago
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