Pending home sales rebound more than expected
Contract signings to purchase previously owned homes rebounded in August by more than forecast, helped by low mortgage rates and continued household income gains.
The National Association of Realtors' index of pending home sales increased 1.6% from the previous month, with the gauge's 107.3 level at the second-highest since the end of 2017, data from the group showed Thursday. The rise compared with the median estimate of economists for a 1% gain and a 2.5% drop in July. Contract signings were up 1.1% year-over-year on an unadjusted basis, the second straight rise.
The report adds to signs that the housing market is regaining momentum, potentially giving a boost to the economy for the first time since 2017, amid Federal Reserve interest-rate cuts and still-solid job growth. At the same time, inventories of available homes remain low, continuing to drive up prices and keeping many homes out of buyers' price ranges.
Contract signings were up in all four regions, led by a 3.1% increase in the West, suggesting the strength in the housing market is broad across the country. The data follow reports out over the past week showing rising sales of both previously owned and new homes.
Pending home sales are often considered a leading indicator of existing-home purchases and a measure of the health of the residential real estate market in coming months.
"It is very encouraging that buyers are responding to exceptionally low interest rates," NAR Chief Economist Lawrence Yun said in a statement. "The hope is that housing starts quickly move into higher gear to meet the higher demand. Moreover, broader economic growth will strengthen from increased housing activity."