- Ending home sales in the US fell 7.1% in August, month-over-month and year-over-year.
- Rising mortgage rates above 7% since August have limited homebuyers, leading to a reassessment of housing preferences.
- The Pending Home Sales Index (PHSI) dropped to 71.8 in August, down 7.1% from last month and 18.7% from last year.
- Declines were seen in all four US regions, with the South experiencing the steepest drop of 9.1% in August.
In August, US pending home sales fell by 7.1%, according to the National Association of REALTORS® (NAR). This decline was due to higher mortgage rates, impacting buyers’ decisions.
The Pending Home Sales Index (PHSI), a forward-looking indicator, also saw a 7.1% decline in August, now at 71.8. Year-over-year, this represents an 18.7% decrease.
All US regions experienced declines:
- Northeast: Down 0.9% (18.2% YoY decline)
- Midwest: Down 7.0% (19.1% YoY decline)
- South: Down 9.1% (17.6% YoY decline)
- West: Down 7.7% (21.4% YoY decline)
Lawrence Yun, NAR’s chief economist, emphasized the importance of increased housing inventory and favorable interest rates for market recovery.
Yun also noted that the Federal Reserve should consider slowing rent growth when shaping future monetary policies. Additionally, government shutdowns could disrupt home sales temporarily due to issues like the absence of flood insurance or delays in government-backed mortgage issuance.