Fewer pending home sales seen last month


There were fewer pending home sales in August, which could mark the beginning of the housing market's slow season, which often occurs in the fall and winter months.

There were fewer pending home sales in August, which could mark the beginning of the housing market's slow season, that often occurs in the fall and winter months.

In August, pending home sales declined 2.6 percent from a month earlier to a mark of 99.2, according to a report from the National Association of Realtors. A score of 100 indicates the pending sales rate when the industry group started keeping track in 2001.

Despite fewer pending home sales during the month, there were still many more transactions compared to August 2011, the report said.

"The index shows 16 consecutive months of year-over-year increases, and that has translated into a higher number of closed sales," said NAR chief economist Lawrence Yun. "Year-to-date existing-home sales are 9 percent above the same period last year, but sales were relatively flat from 2008 through 2011."

Regionally, pending home sales in the Northeast increased 0.9 percent from the previous month, and was the only region to experience a positive gain, the report said. Meanwhile, the rate in the Midwest dipped 2.6 percent, while the South and West experienced declines of 1.1 and 7.2 percent, respectively.

Fixed Mortgage Rates Reach New Lows
Pending home sales have increased on an annual basis every month in 2012. This could be the result of mortgage rates hovering below 4 percent for all but one week so far this year.

Most recently, during the week ending September 22, the average rate for a 30-year FRM dropped to 3.4 percent from 3.49 percent a week earlier, according to a report from Freddie Mac. Meanwhile, 15-year fixed-rate mortgages averaged 2.73 percent, down from 2.77 percent during the same period.

A number of economic reports and housing market gains were believed to have contributed to the downward changes.

"Fixed mortgage rates continued to decline this week, largely due to the Federal Reserve's purchases of mortgage securities, and should support an already improving housing market," said Freddie Mac vice president and chief economist Frank Nothaft. "For instance, the S&P/Case-Shiller 20-city home price index rose 1.2 percent over the 12 months ending in July, reflecting the largest annual increase since August 2010."

If mortgage rates continue on this downward trajectory, it could result in an increased home sales rate in the latter half of the year.

 


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