Home Sales Rebounded Sharply in Aug After Recent Dips | The Salesmark

Home Sales Rebounded Sharply in August After Recent Dips

Home Sales Rebounded Sharply in August After Recent Dips

Home sales rebounded strongly in August after two months of declines, the National Association of Realtors reported on Wednesday. The pending home sales index, which is a measure of home sales contracts, increased 8.1% to 119.5, following July’s 1.8% drop. Year-over-year contract signings were down 8.3%. “Rising inventory and moderating price conditions are bringing buyers back to the market,” said Lawrence Yun, NAR’s chief economist. “Affordability, however, remains challenging as home price gains are roughly three times wage growth.”

All regions of the country saw monthly increases in sales, though on a year-over-year basis sales were down everywhere, with the Northeast being the hardest hit. Comparisons have been skewed, however, from the effects of the coronavirus, which sparked a housing boom that began last year. “The more moderately priced regions of the South and Midwest are experiencing the stronger signing of contracts to buy, which is not surprising,” Yun said. “This can be attributed to some employees who have the flexibility to work from anywhere, as they choose to reside in more affordable places.”
Housing remains one of the strongest sectors of the economy, as a combination of low mortgage rates and pent-up demand drives sales and prices to record levels. However, the market has been plagued by a lack of housing inventory for sale, causing month-to-month fluctuations in sales.

The industry has also been facing supply shortages of key materials, pushing out completion dates for new homes which often help offset demand when there are not enough existing homes available. “Real estate markets are moving toward a new equilibrium, as the pandemic frenzy to find a more spacious home in greener suburbs and lock-in historically-low rates has given way to a more tempered search for affordability,” Realtor.com Manager of Economic Research George Ratiu said in a statement. “Record-high prices are motivating buyers to be more selective, and with monetary tightening expected to push rates higher, buyers are likely to become even more cost-conscious. The days of liberal price-escalation clauses, home inspection waivers, and dozens of multiple bids are likely behind us, as the share of homes for sale with price reductions is growing,” he added.

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