Based on the most recent data, it looked like home sales were set to slow a bit as the weather cooled off. Then August happened. And now it looks like home sales are ready to speed up instead.
According to a new report from the National Association of Realtors, pending home sales saw “significant gains” in August, rising by 8.1% over July.
August’s increase ends a two-month streak of pending home sales, an indicator of future home sales based on signed real estate contracts, declining. Pending home sales decreased in both June and July.
That trend was reversed in August, with each of the four major regions of the U.S. seeing month-over-month increases in contract activity.
It should be noted that pending home sales in August 2021 were down 8.3% from August 2020. However, the increase in August 2021 over July 2021 was a sizeable one that indicates that home sales are likely to pick in the coming months.
The reason for the increase, according to NAR Chief Economist Lawrence Yun, was an increase in available inventory.
"Rising inventory and moderating price conditions are bringing buyers back to the market," Yun said. "Affordability, however, remains challenging as home price gains are roughly three times wage growth."
Nevertheless, signed contract activity was up across the country, with the highest increases seen in the South and Midwest.
"The more moderately priced regions of the South and Midwest are experiencing stronger signing of contracts to buy, which is not surprising," Yun said. "This can be attributed to some employees who have the flexibility to work from anywhere, as they choose to reside in more affordable places."
According to NAR’s report, pending home sales increased 10.4% in the Midwest, 8.6% in the South, 7.2% in the West, and 4.6% in the Northeast.