Pending home sales rose rose 6.4 percent from July to August, to the highest level in more than two years, the National Association of Realtors said.
August marked the seventh straight month of increases in NAR’s pending home sales index. But there has likely been some double counting in recent months because some buyers who were under contract but failed to close have signed new contracts to buy, said Lawrence Yun, NAR chief economist.
"The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales and issues regarding complex new appraisal rules," Yun said in a statement. "No doubt many first-time buyers are rushing to beat the deadline for the $8,000 (first-time homebuyers) tax credit, which expires at the end of next month."
NAR’s Pending Home Sales Index rose 6.4 percent to 103.8, up from a reading of 97.6 in July. The index is up 12.4 percent from a year ago and at the highest level since a reading of 104.5 reading in March 2007.
A reading of 100 is equal to the average level of contract activity during 2001, the year the index was launched and the first of five consecutive record years for sales of previously owned homes.
At the regional level, pending home sales were up in all four areas of the country, in both monthly and annual comparisons.
The West saw the strongest growth, with pending home sales up 16 percent from July to August and 22.3 percent from a year ago, to an index reading of 130.5.
The index was up 8.2 percent in the Northeast, to 85.3, a 12 percent increase from a year ago.
In the Midwest, the index rose 3.1 percent to 90.8, up 7.6 percent from a year ago.
The South saw a 0.8 percent bump in pending home sales from July to August, to 104.6, up 8.2 percent from a year ago.
In a separate announcement, the U.S. Census Bureau said construction spending grew by 0.8 percent from July to August, to a seasonally adjusted annual rate of $941.9 billion — an 11.6 percent decrease from a year ago.
Spending on private construction grew by 1.8 percent from July to August, to an annual rate of $622.1 billion, while public construction shrank by 1.1 percent to $319.8 billion. Looking back a year, however, spending on private construction was down 17.8 percent while public construction grew by 3.3 percent.
Residential construction was the main driver in the month-over-month increase in private construction, growing 4.7 percent from July to August to a seasonally adjusted annual rate of $249.5 billion, down 26.7 percent from a year ago.
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