The number of homes under sales contract hit a record high in the National Association of Realtors’ 19-year history of monthly surveys.
The number of pending homes increased 8.8 percent since July and were up nearly a quarter since last August. The pending home sales index reached a high-water mark of 132.8, meaning sales were 32.8 percent higher than the index’s 2001 starting level of 100.
“While I did very much expect the housing sector to be stable during the pandemic-induced economic shutdowns, I am pleasantly surprised to see the industry bounce back so strongly and so quickly,” said Lawrence Yun, the association’s chief economist.
Near-zero interest rates from the Federal Reserve have helped push mortgage rates to record lows, which has helped fuel the buying spree.
“Tremendously low mortgage rates – below 3 percent – have again
- The National Association of Realtors’ Pending Home Sales Index surged 8.8% last month to an all-time high of 132.8, signaling the US housing market’s rally continued into the fall.
- Economists surveyed by Bloomberg expected an increase of 3.1%.
- The reading is the fourth-straight climb for the index. All four major US regions notched growth in August, with the West seeing the biggest improvement.
- The pace of home sales rocketed through the summer as Americans leveraged record-low mortgage rates. The sector has served as a rare bright spot in the pandemic-rattled economy.
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Record-low mortgage rates drove home sales
A sale pending sign is posted in front of a home for sale in San Anselmo, California.
Justin Sullivan | Getty Images
Pending home sales rose 8.8% in August compared with July, reaching a record high pace, according to the National Association of Realtors survey, which dates to January 2001.
Sales were 24.2% higher than August 2019.
These sales track signed contracts on existing homes, not closings, so they are an indicator of closed sales in the next one to two months.
“Tremendously low mortgage rates – below 3% – have again helped pending home sales climb in August,” said Lawrence Yun, NAR’s chief economist. “Additionally, the Fed intends to hold short-term fed funds rates near 0% for the foreseeable future, which should, in the absence of inflationary pressure, keep mortgage rates low, and that will undoubtedly aid homebuyers continuing to enter the marketplace.”
Yun also noted that not all
WASHINGTON (Reuters) – Contracts to buy U.S. previously owned homes surged to a record high in August, suggesting housing market activity was gathering speed amid record-low mortgage rates.
The National Association of Realtors said on Wednesday its Pending Home Sales Index, based on contracts signed last month, jumped 8.8% to an all-time high of 132.8 last month. Economists polled by Reuters had forecast pending home contracts, which become sales after a month or two, rising 3.4% in August.
Pending home sales increased 24.2% from a year ago. The housing market has pressed ahead even as the COVID-19 pandemic has thrown millions out of work. The unemployment burden has fallen disproportionately on low-wage