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Pending-Home Sales Dip by 1.2% Over August

Alongside somewhat stable home prices, pending-home sales slid back over August with a few regions inching up over others, according to an index recently compiled by the ""National Association of Realtors"":http://www.realtor.org/ (NAR). Even so, the numbers reflect a better balance sheet for lenders and sellers, who bore the brunt of sales much worse for the wear over the same period last year.


Presenting the ""Pending Home Sales Index"":http://www.realtor.org/press_room/news_releases/2011/09/phs_august, the NAR culled the information from a number of sources that listed sales that have not yet been closed.

The trade group found the numbers for pending-home sales plunging by 1.2 percent to hit 88.6 percent in August, down from 89.7 percent over the month before, yet still a few notches above an 82.3-percent dearth in August last year.

Regionally, pending-home sales in some states fell back a few notches on a month-over-month basis, nevertheless remaining higher than the same numbers seen in August 2010. With the Midwest falling 3.7 percent to smack into 76.2 percent over August, the South rose again by 2.6 percent to hit 96.9 percent over the same period.


The West lost 2.4 percent, dipping to 108.1 percent over August, still 10.5 percent above numbers from the same time last year, while the Northeast suffered the most, dropping 5.8 percent to crest at 6.3 percent over August this year.

""The biggest monthly decline was in the Northeast, which was significantly disrupted by Hurricane Irene in the closing weekend of August,"" ""Lawrence Yun"":http://www.realtor.org/research/chief_economist_bio, chief economist with NAR, said in a ""statement"":http://www.realtor.org/press_room/news_releases/2011/09/phs_august. ""But broadly speaking, contract signing activity has been holding in a narrow range for many months.""

Yun attributed underperforming markets to a demand bubble in household formation, largely thanks to a midlevel failure in contracts. He faulted a denial of credit for homebuyers as the principal reason.

""Based on the improving fundamentals of population growth, some job additions, rent increases and higher stock market wealth, we should be seeing existing-home sales closer to 5.5 million, but are expecting just over 4.9 million this year,"" he said.

The reason for the denial of credit: ""unnecessarily restrictive mortgage underwriting standards,"" which he describes as responsible for undermining the housing recovery and presenting more risk to the health of the economy at large.

Yun also highlighted a dearth in consumer confidence as responsible for continuing problems, and tacked on worries about homebuyers who could ""face notably higher mortgage rates on jumbo loans because of a lack of competition in the banking industry.""

The last index ""registered a 1.3-percent falloff"":https://themreport.com/articles/pending-home-sales-dip-by-13-in-july-2011-08-29 in July pending-home sales from 90.9 percent seen in June.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.

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