For the first time in months, pending home sales are above year-over-year levels, according to a recent report from the National Association Realtors. Current conditions appear favorable for homebuyers, as inventory is on the way up and home prices are climbing at a slow rate.
The NAR report showed that pending home sales increased 0.3 percent from August to September, 1 percent higher than levels seen in September 2013.
"Housing supply for existing homes was up in September 6 percent from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year," explained Lawrence Yun, NAR chief economist. "Additionally, the current spectacularly low mortgage rates should help more buyers reach the market."
The biggest gains on a monthly basis belonged to the South region, at 1.4 percent, followed by the Northeast at 1.2 percent. On the other hand, both the West and the Midwest decreased, down 0.8 percent and 1.2 percent, respectively.
Current conditions are also affected by credit standards. Tight conditions are preventing some buyers from entering the market. Yun noted that positive changes could be coming due to the final rule on Qualified Residential Mortgages, which might loosen access to credit.
Home price gains moderate
In addition to the slower monthly increase in pending home sales, home prices have also been increasing at a more gentle pace.
According to Black Knight Financial Services, prices ticked up only 0.1 percent from July to August. The organization's Home Price Index showed that eight of the 40 largest metropolitan areas saw prices reach new highs in August. Metros with the largest gains were Detroit, The Villages, Florida and Myrtle Beach, South Carolina. States with the greatest month-over-month increases were New York, Michigan and Nevada.
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