Contract signings are showing some improvement and increased 0.5 percent in September on a month over month basis. This, according to a report on Pending Home Sales by the National Association of Realtors (NAR). However, sales dropped 1 percent over last year, making September the ninth consecutive month to record annual decreases, the report indicated.
The latest monthly increase in pending home sales is a good, stabilizing trend according to Lawrence Yun, Chief Economist, NAR. "This shows that buyers are out there on the sidelines, waiting to jump in once more inventory becomes available and the price is right," he said. Additionally, Yun said that the thriving economy was yet to have a substantial impact on the housing market. "The general condition of the economy is excellent, it simply has not lifted home sales this year. Home prices are still rising, so people who are purchasing are still seeing wealth gains."
The regional breakdown of these sales gives a clearer picture on where home sales are heading. The report indicated that pending home sales in the Northeast dropped 0.4 percent in September and were 2.7 percent below a year ago. In the Midwest, the index rose 1.2 percent month over month but it was 1.1 percent lower compared to the same period last year. The steepest flip-flop in pending home sales was seen in the South. While contract signings fell 1.4 percent in September compared to August, they actually rose 3.3 percent compared to a year ago. The index in the West increased 4.5 percent in September to 93.1 and plunged 7.4 percent below a year ago.
"Lingering weakness from Hurricanes Florence and Michael held pending sales back in the South from last month," said Danielle Hale, Chief Economist, Realtor.com. "Pending home sales in the remaining three regions were mixed but the gains in the West and Midwest outweighed the slight decline in the Northeast. However, all three regions showed fewer contract signings than one year ago."