- Prior month -7.1%
- Pending home sales up 1.1% versus -1.8% expected
- Pending home index rose to 72.6 from 71.8
Looking at the different regions
- Northeast PHSI decreased by 0.9% to 62.6, marking an 18.2% reduction from August 2022.
- Midwest index dropped by 7.0% to 71.3, down 19.1% from the previous year.
- South PHSI fell by 9.1% to 86.5, showing a 17.6% dip from the prior year.
- West index retreated by 7.7% to 56.3, sinking 21.4% compared to August 2022.
From Lawrence Yun, NAR Chief Economist:
- “Mortgage rates have been rising above 7% since August, which has diminished the pool of home buyers.”
- “Some would-be home buyers are taking a pause and readjusting their expectations about the location and type of home to better fit their budgets.”
- “It’s clear that increased housing inventory and better interest rates are essential to revive the housing market.”
Although higher, the index is scraping along the bottom. So it is a bit misleading. Mortgage rates are not only above 7% but approached 8% this week. That will likely keep the index near its lows. It is also hard to increase inventory, and the Fed seems intent on keeping rates higher for longer. Banks are also concerned about the credit quality of their loan portfolio which keeps the mortgage spread to treasuries fairly wide.