WASHINGTON – More people signed contracts to purchase homes in September, an increase that likely points to rising sales in the closing months of 2016.
The National Association of Realtors said Thursday that its seasonally adjusted pending home sales index rose 1.5 percent last month to 110. Pending sales rose in the South and West in September, while slumping in the colder parts of the country: the Northeast and Midwest.
Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed.
Sales of existing homes have improved for much of this year. Completed sales rose 3.2 percent between August and September to a seasonally adjusted annual rate of 5.47 million, the Realtors said last week.
But stronger growth in sales is hindered by a dwindling supply of listings. Steady hiring and low mortgage rates have encouraged more Americans to search for homes to buy, but their options are increasingly limited.
The supply of available homes stood at 2.04 million units, down 6.8 percent from a year ago. Tight inventories drove the median price of existing homes up 5.6 percent from a year ago to $234,200.
New home sales were also up in September.
New-home sales advanced 3.1 percent last month to a seasonally adjusted annual rate of 593,000, the Commerce Department said Wednesday. The gains were concentrated in the Northeast, Midwest and South, as sales tumbled last month in the West.
So far this year, sales have increased 13 percent compared to the same period in 2015. The improvement largely reflects the better economic outlook as paychecks are improving and a growing share of homebuyers are seeking new properties.
“Demand for new homes remains strong in response to employment growth, wage gains, positive demographics and mortgage rates near all-time lows,” said David Berson, chief economist at Nationwide.
Sales have steadily grown from the depths of the housing bust and Great Recession over the past three years. Still, new-home sales still lag their historic pace of roughly 650,000 a year. If the sales pace for 2016 holds, sales will total roughly 566,000 at the end of this year.
