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 earners in the services industry, who tend to be young.
There has been a surge in demand for housing in suburbs and low-density areas as Americans seek spacious accommodation in the new work-from-home era.
The 30-year fixed mortgage rate is averaging below 3%, according to data from mortgage finance agency Freddie Mac. Reports this month showed a surge in homebuilder confidence in September, and an acceleration in single-family home construction and sales of both new and previously owned homes in August.
Last month, pending home sales rose in all four regions.
Reporting by Lucia Mutikani; Editing by Andrea Ricci