Pending home sales rebound after 3 months of decline

by Steve Randall30 Nov 2017
There was a 3.5% month-over-month rise in pending home sales nationwide in October, reversing a three-month downward trend.

Contract signings were higher in three of the four major regions, led by the South (+7.4%) bouncing back from the impact of the hurricanes, while the Midwest was up 2.8%, and the Northeast up 0.5%. But the West saw a dip from the previous month (-0.7%) the National Association of Realtors says.

Its Pending Home Sales Index was at 109.3, its highest reading since June (110.0) although it remained 0.6% below October 2016.

"Last month's solid increase in contract signings were still not enough to keep activity from declining on an annual basis for the sixth time in seven months," said NAR chief economist Lawrence Yun.

The decline in pending sales from a year ago was of course due to continued tight inventory, which Yun says has not abated in the fall. And that continues to dissuade some potential buyers from the market.

He highlights that inventory at the end of October was the lowest for the month since 1999.

"Until new home construction climbs even higher and more investors and homeowners put their home on the market, sales will continue to severely trail underlying demand," he added.

Yun expects existing home sales for the whole of 2017 to be 5.52 million, up 1.3% from 2016 with the median price up 6%.

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