Pending Home Sales Reached Second Highest Reading In Over A Decade
In the latest indication that the housing market may be showing signs of life nearly a decade after the housing bubble burst, the latest data from the National Association of Realtors, contracts to purchase previously owned homes were up, with the Pending Home Sales Index rising 1.3% to its second-highest reading in more than 10 years. In a statement on the latest data, NAR Chief Economist Lawrence Yun said, “Amidst tight inventory conditions that have lingered the entire summer, contract activity last month was able to pick up at least modestly in a majority of areas.” However, he cautioned, “More home shoppers having success is good news for the housing market heading into the fall, but buyers still have few choices and little time before deciding to make an offer on a home available for sale. There’s little doubt there’d be more sales activity right now if there were more affordable listings on the market.” Reuters notes that contracts were up 0.8% in the Northeast, 0.8% in the South, and 7.3% in the West, with the only decline coming from a 2.9% decrease in the Midwest. Reuters says that the overall increase in pending home sales suggests the economy was “regaining sufficient momentum” for a Federal Reserve interest rates hike later this year. RBS Senior Economist Kevin Cummins said, “The latest rise suggests some improvement in existing home sales. However, we may not see all of the latest reported increase filter through as quickly as it usually does since there appears to be some delays in the pipeline.”
What This Means For Small Businesses
Though it’s too early to say definitively that the housing market has recovered from the recession, the latest data is another signal that the market may be heading in the right direction after years of uncertainty.
The Wall Street Journal also reports on the latest pending home sales data.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.