Pending-home sales pick up in September—increasing 1.5 percent
Pending-home sales increased by 1.5 percent in September—marking the second consecutive month of growth by rising to 108.7. Year-over-year contract signings jumped 3.9 percent.
NAR’s chief economist, Lawrence Yun, credits the historically low mortgage rates for the increase in pending-home sales. “Even though home prices are rising faster than income, national buying power has increased by 6 percent because of better interest rates. Furthermore, we’ve seen increased foot traffic as more buyers are evidently eager searching to become homeowners.”
Areas with the largest increase in active listings in comparison to last year, include: Fort Wayne, IN, Rochester, NY, Pueblo, CO, Columbus, Ohio and Topeka, KS.
The inventory factor
Yun explains the lack of inventory is keeping these numbers from increasing even higher. “Going forward, interest rates will surely not decline in a sizable way, so the changes in the median price will be the key to housing affordability. But home prices are rising too fast because of insufficient inventory.”
To meet housing market demands, Yun suggests alternatives to merely increasing home building. “In addition to boosting traditional home building, we should explore a greater utilization of modular factory constructed homes, converting old shopping malls or vacant office spaces into condominiums, permitting more accessory dwelling units, and other supply-increasing actions, in order to meet the rising demand for new housing,” he explains.
A regional breakdown
The four major regions experienced a mixed-bag of numbers in September, though all four regions are up in comparison to last year:
- Northeast: declined 0.4 percent to 93.9—1.3 percent higher than September 2018
- Midwest: increased 3.1 percent to 104.4—2.7 percent higher than September 2018
- South: increased 2.6 percent to 127.5—5.7 percent higher than September 2018
- West: declined 1.3 percent to 95.1—3.4 percent higher than September 2018