After two consecutive monthly declines, the Pending Home Sales Index increased modestly in October from an upwardly revised September reading, and has increased year-over-year for 14 consecutive months. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), increased 0.2% in October to 107.7 and is 3.9% above the same month a year ago.
The PHSI increased in the Northeast and West by 4.5% and 1.7%, but declined in the South and Midwest by 1.7% and 1.0% respectively. Year- over-year, The West, Northeast and Midwest were up by 10.4%, 6.8% and 3.3% respectively. The South reported a small 0.3% decline from last October.
New home sales rebounded in October, and the October PHSI suggests further improvement for existing sales. Despite the decline in October, improving economic conditions, rising employment and very affordable mortgage rates suggest a continuing recovery in existing sales. However, the long-term weakness among first-time buyers will limit all sales as we head into 2016.