In general, “fall” and “retreat” aren’t words that inspire confidence in anyone who pays close attention to real estate markets, but the National Association of Realtors® offered a silver lining in the release of August’s pending home sales.
Yesterday we announced that pending home sales saw a 1.4% decline from July to August. NAR Chief Economist Lawrence Yun noted that high prices and limited inventory were holding back buyers, and while that may sound like a sour note, don’t reach for the panic button just yet.
Despite the decline, the Pending Home Sales Index is still over 6% higher than August’s numbers from last year. Yes, there are some potential bumps in the road ahead, with talk of a potential government shutdown and changes in the mortgage closing process coming up, but sales are expected to maintain their current pace.
That’s despite existing-housing supply moving little during the summer, and new construction offering little relief in the near-term.
So, the fact that pending homes sales are lower may not be what everyone wanted to see, but the story looks different if you ask that age-old economic question: “Compared to what?”