After 3 straight months of improvement, the Pending Home Sales Index slid lower in September. As compared to August, September’s reading fell 2 percent.
A “pending home sale” is a home under contract to sell, but not yet closed. The data is drawn from a combination of local real estate associations and national brokers, and represents 20 percent of all purchase transactions in a given month.
Because of the large sample set, and because 80 percent of homes under contract close within 60 days, the Pending Home Sales Index is a terrific future indicator for the housing market. A high correlation exists between the Pending Home Sales Index and the NAR’s monthly Existing Home Sales report issued two months hence.
Expect home sales to idle into the New Year, therefore.
For home buyers in Philadelphia and surrounding counties , this is good news. Over the last two months, housing markets have overwhelmingly favored home sellers.
Consider than, since June, the volume of both new home sales and existing home sales has increased, causing the available home inventory to fall by months. Meanwhile, helped by low interest rates, demand from buyers has remained relatively stable.
As with everything in economics, falling supply with constant demand leads to higher prices.
Therefore, the Pending Home Sales Index’s fading September figures suggest a more balanced supply-and-demand curve in the months ahead, a move that should suppress rising home prices and shift negotiation leverage back to the buy-side.
So long as mortgage rates remain rock bottom, the autumn season is looking like a terrific time to buy, and if the activity seen by our agents in the past few weeks is indicative, buyers are taking advantage of this and buying themselves year end presents to provide financial stability and security for their families.
Related articles
- Home Sales Are Back On The Rise After A 2-Month Pullback (c21agvoices.com)
- Existing Home Sales Rebound In August, Give Hope For Autumn (c21agvoices.com)
- As Buyer Foot Traffic Rises, So Does Homebuilder Confidence (c21agvoices.com)
