When looking at future home sales, the National Association of Realtors® (NAR)looks to its Pending Home Sales Index, which measures the total amount of purchase contracts to buy homes for sale and condos for sale during a given month. Since it only tracks contracts signed and not actual closings, it is considered an accurate measurement of upcoming sales.
The Pending Homes Sales Index was virtually flat in October, increasing ever so slightly at 0.2 percent from September. Currently, the Index is 39 percent above where it was this time last year.
NAR’s chief economist, Lawrence Yun says pending sales have plateaued because there is a limited supply of inventory available for sale. Mr. Yun added, “Contract signings in October made the most strides in the Northeast, which hasn't seen much of the drastic price appreciation and supply constraints that are occurring in other parts of the country.” He continued, “In the most competitive metro areas – particularly those in the South and West – affordability concerns remained heightened as low inventory continues to drive up prices.”
Looking at regional statistics, findings show pending sales are up 4.5 percent in the Northeast. However, purchase contracts signed were up just 1.7 percent in the West and down in the South and Midwest.
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