The Pending Home Sales Index decreased in August for the fifth time in six months, pulling 2017 existing sales below the pace set in 2016. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), decreased 2.6% to 106.3 in August, the lowest level since January 2016. The PHSI has now declined on an annual basis in four of the past five months, and is 2.6% below its level in August 2016.
The PHSI decreased in all four regions, ranging from 1.0% in the West to 4.4% in the Northeast. Year-over-year, the PHSI also decreased in all four regions, ranging from 1.7% in the South to 4.1% in the Northeast.
NAR reported that demand continues to overwhelm the terribly low supply levels in much of the country. August existing sales declined for the third month in a row, and new home sales also fell in August. However, most of the missed closings due to hurricanes will appear in 2018. Builder confidence remains on firm ground, suggesting that new residential construction will continue its upward trend and address the tight inventory of homes for sale.