Boosted by increases in the West and South, the Pending Home Sales Index increased 1.5% in September, and climbed 2.4% higher than the same month last year. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), increased to 110.0 in September from a downwardly revised 108.4 in August.
The PHSI increased 4.7% in the West and 1.9% in the South, but decreased 0.2% in the Midwest and 1.6% in the Northeast. Year-over-year, the PHSI was up 7.7% in the Northeast, 4.0% in the West and 1.7% in the South, while falling 1.0% in the Midwest.
The PHSI has increased year-over-year for 22 of the past 25 months, so the September increase suggests that the upward trend in existing sales will continue, as prospective first-time home buyers step up their plans. Builder confidence remained solid in October, and in September new home sales continued to gain. These reports are good news for new residential construction as the housing recovery continues to address demand among first-time buyers and broaden across a wider range of markets during the balance of 2016 and into 2017.