All four major regions of the U.S. posted growth in sales contract activity last month, led by the West, the National Association of REALTORS® reported Thursday. NAR’s Pending Home Sales Index—a forward-looking indicator based on contract signings—rose 1.6% last month, erasing last month’s decrease. Contract signings are now up 2.5% year over year, NAR reports.
“It is very encouraging that buyers are responding to exceptionally low interest rates,” says Lawrence Yun, NAR’s chief economist. “The notable sales slump in the West region over recent years appears to be over. Rising demand will reaccelerate home price appreciation in the absence of more supply.”
Western regions including California and Arizona saw a 3.1% uptick in pending home sales in August, an increase of 8% from a year ago. The South posted a 1.4% month-over-month increase in contract signings, followed by a 1.4% increase in the Northeast and a 0.6% gain in the Midwest.
“With interest rates expected to remain low, home sales are forecasted to rise in the coming months and into 2020,” Yun says. “Unfortunately, so far in 2019, new-home construction is down 2%. The hope is that housing starts quickly move into higher gear to meet the higher demand. Moreover, broader economic growth will strengthen from increased housing activity.”
NAR is forecasting existing-home sales to increase 0.6% in 2019 and by another 3.4% in 2020.
