U.S. pending home sales pull back sharply in August
NAR said its pending home sales index tumbled by 2.4 percent to 108.5 in August after surging up by 1.2 percent to a revised 111.2 in July. Economists had expected pending sales to come in roughly flat.
With the steep drop during the month, the pending home sales index fell to its lowest level since hitting 105.4 in January. Pending sales were also down by 0.2 percent compared to a year ago.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
The decline in pending home sales was partly due to a pullback in the Western region, where pending sales tumbled by 5.3 percent in August after surging up by 7.1 percent in July.
Pending home sales in the South also slumped by 3.2 percent and pending sales in the Midwest fell by 0.9 percent, while pending sales in the Northeast rose 1.3 percent.
NAR said Yun expects existing home sales to be around 5.36 million in 2016, a 2.1 percent increase from 2015 and the highest annual pace since 2006. Median existing home price growth is forecast at 4 percent. ■