Despite Higher Prices and Higher Mortgage Rates, Americans Are Buying Homes – The NY Journal

Although the housing market in the United States is expensive and complicated, buyers are determined to purchase a second-hand property, because according to data from the National Association of Realtors (NAR), Pending home sales increased 0.9% in Julymarking the second consecutive monthly increase.

The Pending Home Sales Index (PHSI) is a leading indicator for the real estate sector, based on pending sales of existing homes. A sale is considered pending when the contract is signed but the transaction is not closedalthough the sale usually ends within one or two months after signing.

The PHSI rose 0.9% to 77.6 in July. Year over year, pending transactions fell 14.0%. An index of 100 is equivalent to the level of contractual activity in 2001.

“The small increase in contract signings shows the potential for further increases in light of the fact that many people have lost multiple home purchase offers,” said Lawrence Yun, NAR’s chief economist. “Jobs are being created and therefore expanding the pool of potential home buyers. However, the increase in Mortgage rates and limited inventory have hindered temporarily the possibility of buying for many.”

According to the NAR report, the Northeast and Midwest posted monthly losses, while sales in the South and West grew. All four US regions experienced year-on-year drops in transactions.

The Northeast PHSI contracted 5.8% from last month to 63.2a 20.2% decrease from July 2022. The Midwest index fell 0.4% to 77.5 in July, down 16.0% from a year ago.

The South PHSI increased 2.0% to 95.3 in July, declining 10.9% from a year earlier. The Western index improved 6.2% in July to 61.3falling 12.8% from July 2022.

“Interestingly, the western region experienced a significant drop in prices last year and as a result, buyers are returning quickly“Yun added.

Keep reading: 
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