Pending sales rebound in October
Pending sales in the United States were up in the October, according to the National Association of Realtors. This marked the first month-over-month increase since June, although pending sales continued to decline on an annual basis.
The National Association of Realtors' Pending Home Sales Index jumped to 109.3 in October, a 3.5 percent increase from September to reach its highest point since June. However, the figure was also down 0.6 percent from October 2016, marking the fourth consecutive month of year-over-year decreases.
The Pending Home Sales Index is based on a national sample of homes, usually representing about 20 percent of existing home sales. It measures transactions where a contract has been signed but the sale has not yet been closed, an action which typically takes place within two months. An index of 100 is equal to sales activity in 2001; the existing home sales volume in this year fell between 5 million and 5.5 million, which is considered normal for the current U.S. population.
Pending sales have only increased from the previous month on two other occasions this year, in February and June. They have grown annually in four of the first 10 months of 2017.
There were 1.8 million existing homes for sale at the end of October, the lowest number since the National Association of Realtors began tracking this information in 1999. Lawrence Yun, chief economist at the National Association of Realtors, said the continuing hurdles of low inventory, longer homeownership tenure, and higher prices on available properties are discouraging many buyers who would otherwise be interested in purchasing a home.
"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," said Yun.
Yun is predicting that existing home sales will total about 5.52 million in 2017, which would be a 1.3 percent increase from 2016. He also expects that the national median price for an existing home will climb approximately 6 percent. In 2016, existing sales in the U.S. grew by 3.8 percent while median prices were up 5.1 percent.
Each of the four geographical regions identified by the National Association of Realtors experienced growth in pending sales, with the exception of the West. In this region, the Pending Home Sales Index fell 0.7 percent from September and 4.4 percent from October 2016 to 101.6.
In the South, pending sales rebounded strongly after being disrupted by hurricanes in September. The region's index climbed 7.4 percent from the previous month and 2 percent from the previous year to 123.6.
Pending sales in the Northeast were up 0.5 percent to an index of 95, but down 1.9 percent from October 2016. In the Midwest, the index rose 2.8 percent from September but fell 0.9 percent from October 2016 to reach a figure of 105.8.
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