Pending home sales increased in September, but have decreased on an annual basis for nine consecutive months. The Pending Home Sales Index increased 0.5% in September, but remains down 1.0% year-over-year. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR). The PHSI increased to 104.6 in September, from 104.1 in August.
The PHSI increased 4.5% in the West and 1.2% in the Midwest, but decreased 0.4% in the Northeast and 1.4% in the South. Year-over-year, the PHSI increased 3.3% in the South, but declined 1.1% in the Midwest, 2.7% in the Northeast and 7.4% in the West.
Existing sales and new home sales declined in September, and affordability continues to erode as mortgage rates rise. However, builder confidence increased in October, as builders continue to see solid housing demand fueled by a growing economy, suggesting new residential construction will continue to grow.