This week, we get another major housing indicator of how the third quarter of 2021 will wrap up with the National Association of Realtors (NAR) issues its Pending Home Sales Report for August 2021 on Wednesday, September 29.
NAR’s Pending Home Sales Index (PHSI) measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. Because a home goes under contract a month or two before it is sold, the PHSI generally leads Existing-Home Sales data by a month or two.
New home sales data released by the U.S. Census Bureau found a 1.5% rise in new home sales in August to an annualized pace of 740,000, New home sales were found to be down 19% from one year prior, but was still 9% above the pace seen in August 2019, not seasonally adjusted.
“Despite the median new home price rising around 20% from a year ago, we believe low mortgage rates and a limited inventory of existing homes for sale should support a continued increase in new homes sales into 2022,” said Mark Palim, Deputy Chief Economist at Fannie Mae.
NAR’s last PHSI dipped modestly in July, noting two consecutive months of declines, with only the West region registering a month-over-month gain in contract activity, while the other three major U.S. regions reported drops. All four U.S. regions saw transactions decrease year-over-year in July.
"The market may be starting to cool slightly, but at the moment there is not enough supply to match the demand from would-be buyers," said Lawrence Yun, NAR's Chief Economist of the July PHSI. "That said, inventory is slowly increasing and home shoppers should begin to see more options in the coming months. Homes listed for sale are still garnering great interest, but the multiple, frenzied offers–sometimes double-digit bids on one property–have dissipated in most regions. Even in a somewhat calmer market, a number of potential buyers are still choosing to waive appraisals and inspections."
We shall see if inventory remained an issue throughout the dog days of summer as Q3 concludes and we enter the final quarter of a hot 2021 housing market.
Here's what else is happening in The Week Ahead:
- MBA’s Forbearance and Call Volume Survey (Monday)
- DS News Webinar Series, “Examining Ginnie Mae Eligibility Requirements for Single-Family MBS Issuers” (Tuesday)
- Senate Banking Committee Hearing: "CARES Act Oversight of the Treasury and Federal Reserve: Supporting an Equitable Pandemic Recovery" (Tuesday)
- MBA Weekly Applications Survey (Wednesday)
- UCLA Anderson Forecast Webinar: "September 2021 Economic Outlook: Income Inequality, Economic Growth and Recessions" (Wednesday)
- Realtor.com Weekly Housing Market Recap (Wednesday)
- House Subcommittee on Consumer Protection and Financial Institutions Virtual Hearing: "The Future of Banking: How Consolidation, Nonbank Competition, and Technology are Reshaping the Banking System" (Wednesday)
- Freddie Mac Primary Mortgage Market Survey (Thursday)
- House Financial Services Committee Hearing: “Oversight of the Treasury Department's and Federal Reserve's Pandemic Response” (Thursday)
- U.S. Department of Labor's Unemployment Insurance Weekly Claims Report (Thursday)
- Black Knight weekly forbearance data (Friday)