Pending sales of homes bounced back strongly in August with an 8.1% increase after two consecutive months of declines, according to data released Wednesday by the National Association of Realtors.
All four regions—the Northeast, Midwest, South and West—recorded significant growth.
While the increase exceeded analysts’ forecast of 1.8%, it comes as housing inventory has increased and prices have moderated recently.
All four regions—the Northeast, Midwest, South and West—recorded significant growth in contract signings on the month, with the Midwest leading the way with a 10.4% increase. The South, the West and the Northeast followed with increases of 8.6%, 7.2% and 4.6%, respectively.
The gains in the Midwest and the South, which tend to have lower home prices, can be attributed to the shift toward working remotely that has prompted employees to move to more affordable regions.
Because about 80% of all pending home sales will become existing home sales within two months, we expect that existing home sales will also bounce back likely in late September and October, after the recent decline in August.
And it is not completely out of the question that buyers, sensing rising interest rates in late 2022 or early 2023, will feel the need to buy while mortgage rates are still relatively low.
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