Home prices are still moving higher as supplies of available properties remain tight. That formula has caused the market for previously-owned homes to level off since summer, according to National Association of Realtors.
Contract signings, also known as “pending home sales,” retreated in August but remained at a healthy level of activity — rising year–over–year for 12 consecutive months, the Realtors said today.
A modest increase in the West was offset by declines in all other regions. The group’s Pending Home Sales Index, a forward–looking indicator, decreased 1.4 percent to 109.4 in August from 110.9 in July — but is still 6.1 percent above August 2014 (103.1).
“Pending sales have leveled off since mid–summer, with buyers being bounded by rising prices and few available and affordable properties within their budget,” said Lawrence Yun, NAR chief economist. “Even with existing–housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago.”
The national median existing–home price is expected to increase 5.8 percent in 2015 to $220,300. Yun forecasts total existing–home sales this year to increase 7.0 percent to about 5.28 million, about 25 percent below the prior peak set in 2005 (7.08 million).
According to Yun, sales in the coming months should be able to roughly maintain their current pace. However, he warns that there are looming speed bumps that have the potential to impact housing.
“The possibility of a government shutdown and any ongoing instability in the equity markets could cause some households to put off buying for the time being,” adds Yun. There are also changes being implemented in the mortgage closing process next month that “could delay some sales,” he added.