The National Association of Realtors (NAR) released their Pending Home Sales report, which measures signed contracts on existing homes across the nation. This report showed that signed contracts on existing homes fell 2% in August, which was in line with expectations. Home sales contracts are now down 24% year over year. This is the second month in a row where pending sales retracted in the Northeast and certainly shows cooling in housing activity.
The NAR Chief Economist, Lawrence Yun said, “The direction of mortgage rates – upward or downward – is the prime mover for home buying, and decade-high rates have deeply cut into contract signings,” and he added, “If mortgage rates moderate and the economy continues adding jobs, then home buying should also stabilize.” Yun expects the economy will remain sluggish throughout the remainder of this year, with mortgage rates rising to close to 7% in the coming months. “Only when inflation calms down will we see mortgage rates begin to steady,” said Yun.
This is possible, and rates can start to improve near November when the October inflation data is reported. Once this happens, inflation will begin to drop more significantly going forward.
Yun also believes that home prices will finish the year up 9.6% and that sales will pick up a bit in the 4th quarter of 2022.
Source : https://bit.ly/3V1lMUR
By: Jon Iacono