October 2, 2012 (Chris Moore)
Signed contracts for the purchase of existing homes fell during August continuing an uneven pattern that has left sales contracts declining in three of the last five months according to the National Association of Realtors® (NAR) Pending Home Sales Index (PHSI).
Contract signings fell 2.6 percent to 99.2 in August from 101.7 in July but was still 10.7 percent higher than in August of last year when the Index was at 89.6.
Last month’s decrease left the Index at roughly the same level as April 2010 when home purchasing activity had been artificially induced by the home buyer tax credit.
Lawrence Yun, chief economist of NAR, stated, “The performance in month-to-month contract signings has been uneven with ongoing shortages of lower priced inventory in much of the country, and across most price ranges in the West, but activity has remained at notably higher levels this year.”
Three of the four regions in the Index posted declines in their monthly level of sales contract activity, which was in stark contrast to July when three of the four regions reported increases. Three of the four regions still reported a higher level of contract signings compared to a year ago.
The Northeast recorded the only increase in monthly signed contracts, climbing 0.9 percent from July. The West posted the largest decline, falling 7.2 percent from the previous month while the Midwest and the South posted declines of 2.6 and 1.1 percent, respectively.
Compared to August 2011, the Midwest and the Northeast were both 19.9 percent higher, the South improved by 13.2 percent and the West was 4.2 percent lower than last year.
The PHSI is a forward looking indicator which generally indicates closings one to two months in the future.
Tags: pending home sales, existing home sales, contract signings